Inflation fears recede in Malaysia, positive for ringgit

WITH Malaysia inching towards deflation with low oil prices, the implementation of the country's recent GST policy could be viewed as a timely event.

However, considering that oil prices are expected to be on the edge of a reversal, we were worried that Malaysia's inflation could spiral out of control. Therefore, this made May inflation of greater prominence as this should fully reflect the effects of the GST policy.

With inflation released below expectations at 1.8 per cent, our worries were proven unfounded.