Bank Negara holds policy rate steady
Malaysia's central bank sees periods of volatility in regional financial and foreign exchange markets due to global uncertainties
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MALAYSIA'S central bank kept its policy rate at 3 per cent on Wednesday as expected, saying it foresaw more volatility in financial markets, with the ringgit losing 5 per cent against the dollar in the two weeks since Donald Trump's shock US election victory.
Malaysia has been hard hit by capital outflows from emerging markets as investors expect US interest rates to rise faster under a Trump administration that is expected to opt for an expansionary fiscal strategy that will fuel inflation. Foreigners hold around 40 per cent of the total outstanding bonds in the Malaysia market, one of the highest proportions in Asia, making it particularly vulnerable to capital outflows.
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