Malaysia: Domestic bonds keep attracting portfolio inflows – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting give their opinion on the persistent portfolio inflows into the Malaysian bonds market.

Key Quotes

“Malaysia’s debt securities market continued to attract foreign portfolio inflows for the third straight month by MYR3.6bn in Jan 2020 (Dec 2019: +MYR8.1bn; Nov 2019: +MYR8.0bn). This is in line with higher portfolio flows into emerging market debt securities last month.”

“Higher portfolio flows, stable current account surplus, and net foreign direct investments helped to lift overall foreign reserves to USD104.2bn as at end-Jan (from USD103.6bn as at end-Dec 2019).”

“USD/MYR drifted higher to 4.1395 last Friday (7 Feb). Until the coronavirus outbreak is brought under control in mainland China, MYR is likely to stay defensive alongside the CNY and other Asian currencies… The lower crude oil price also weighs on the Ringgit. We expect the Ringgit and other Asian currencies to recover once the virus outbreak comes under control and global growth fears abate.”

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