Malaysia cuts spending, touts ‘cautious and versatile attitude’ within the face of worldwide turmoil
Malaysia cuts spending, touts ‘cautious and versatile attitude’ within the face of worldwide turmoil
The vote also creates uncertainty over the fate of the federal government’s $80 billion budget announced earlier this month, which goals to chop taxes while reducing the budget deficit through more targeted subsidies. The government said the budget might be tabled again after the elections.
“The announcement of the elections essentially resulted in the suspension of the already announced 2023 budget,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. in Singapore.
Malaysia is working towards an election-friendly budget and a smaller deficit
Malaysia is working towards an election-friendly budget and a smaller deficit
Political and monetary uncertainty could weigh on the ringgit, which is already under pressure following Bank Negara Malaysia’s decision to adopt a less aggressive monetary stance than its US counterpart. Not only did he raise rates by a smaller amount, but he also signaled at his September dovish meeting that future tightening of monetary policy was uncertain.
Investors will look to local inflation data due out on October 21 to gauge whether Bank Negara can proceed to adopt a more hawkish stance when it reviews borrowing costs next month. If this doesn’t occur, the trail of least resistance could see the ringgit weaken further.
True, in response to 14 analysts surveyed by Bloomberg, the ringgit rate within the fourth quarter will range from 4.53 to 4.70 per dollar, which indicates that some see it strengthening, not weakening.
