KUALA LUMPUR, Aug 8 (Bernama) -- There is a possibility that Bank Negara Malaysia (BNM) may opt for another rate cut by year-end after a 25 basis point cut in May, given the heightened prospect of a slower global economy, said Kenanga Investment Bank.
The BNM according to the research house has room to embark for another rate cut as soon as in September if the economic outlook continues to deteriorate and the US’ Federal Reserve signals another rate cut this year.
“On the ringgit outlook, we are revising our US dollar and ringgit year-end forecast to 4.20 from 4.10 in view that China may allow the yuan to depreciate, a steady fall in oil price and the higher probability that BNM may cut interest rate,” it said in a note today.
The central bank revealed yesterday that international reserves increased to US$103.9 billion as at July 31, 2019, from US$103.3 billion as at July 15, 2019.
According to BNM, the reserves position is sufficient to finance 7.6 months of retained imports and is 1.2 times the total short-term external debt.