A corner of Kuala Lumpur, Malaysia (Photo: VNA) Kuala Lumpur (VNA) – Malaysia’s economy is expected to remain on the positive growth trajectory moving forward despite uncertainty on the global economic front, as the country still has ample liquidity buffers, according to Bernama news agency.
Inter-Pacific Asset Management Sdn Bhd chief executive officer Datuk Dr Nazri Khan Adam Khan said despite a surge in the US inflation recently, Malaysian bonds, namely Malaysian Government Securities, remained stable.
The market is falling not due to economic factors but due to inflation rising faster than expected, he said, adding Malaysia still has ample liquidity, and the Bank Negara Malaysia (BNM) cut the interest rate four times last year while there is a possibility for the central bank to reduce it further to 1.5 percent from 1.75 percent to stimulate the economic growth.
US Federal Reserve Chairman Jay Powell triggered a sudden sell-off in long-term US Treasury debt and equities, after he vowed to keep monetary policy steady, even as the economy improves and inflation begins to rise.
The US five-year break-even rate, a market-based measure of inflation expectations, exceeded 2.5 percent on March 3 for the first time since 2008, Bloomberg data show.
Meanwhile, Nazri said that Bursa Malaysia is expected to trend higher next week, touching 1,600 points, driven by the downward trend in COVID-19 infections to below 2,000 daily cases of late, as well as the continued recovery in oil prices.
The market is also expected to gain some support over speculation of a snap 15th general election lingering in the market, he said, adding that it could be held once the pandemic is contained as assured by Prime Minister Tan Sri Muhyiddin Yassin.
Additionally, the improving of US-China relations under Joe Biden’s administration is also good catalyst for Malaysia. As both countries are among our major trading partners of Malaysia, the nation should be riding on the positive development to grow the economy, he said./.
VNA
