Archive

Trump-ism And East Asia

• Donald Trump’s abandonment of the US-led international order and efforts to reshape global trade and finance do not bode well for East Asian economies that may find themselves forced by Washington into a Chinese sphere of influence as part of a grand bargain with Beijing.

By Alastair Newton

Malaysia: Policy Rate Held At 3.0% (Consensus 3.0%) in Mar-25

• Despite global uncertainties, Bank Negara Malaysia maintained the policy rate at 3%, citing sustained economic resilience, robust domestic demand, and investment activity. The 5.1% GDP growth in 2024 supports the decision, although external risks remain.
• Inflationary pressures remain contained, with headline inflation at 1.7% in early 2025, supported by easing global cost conditions and lower commodity prices. However, upside risks persist from domestic policy spillovers and external factors, including financial market volatility and trade policy shifts.
• The ringgit remains influenced by external factors, with narrowing interest rate differentials providing support amid global uncertainty. The MPC’s data-dependent approach ensures monetary policy remains conducive to growth while preserving price stability.

Malaysia: Policy Rate Held At 3.0% (Consensus 3.0%) in Jan-25

• Bank Negara Malaysia maintained the Overnight Policy Rate at 3%, consistent with consensus expectations, citing sustained economic growth and manageable inflationary pressures. The decision reflects a balanced approach amid moderating global inflation and easing monetary policy conditions globally.
• Domestic growth remains resilient, driven by robust investment and household spending, but risks such as a potential global slowdown, trade restrictions, and commodity production volatility could weigh on the outlook. Upside growth potential exists from stronger spillovers in technology, tourism, and faster investment execution.
• Inflation is expected to remain contained in 2025, supported by easing cost pressures, though spillover effects from domestic policies and fluctuations in commodity prices could introduce upside risks. The MPC’s vigilant, data-driven approach underscores its commitment to sustainable growth and price stability.

Malaysia: Policy Rate Held At 3.0% (Consensus 3.0%) in Nov-24

• Bank Negara Malaysia's MPC maintained its official policy rate at 3%, in line with forecasts, highlighting sustained economic strength and controlled inflation.
• Inflation, currently moderate, faces potential upside risks from domestic policy effects, global commodity prices, and financial market changes.
• The MPC's data-dependent stance implies ongoing assessments of inflation and growth developments will inform future rate decisions.