Malaysia: What next for monetary policy post-election

While Malaysia’s central bank (BNM) left interest rates unchanged at today’s scheduled monetary policy meeting, the outlook for monetary policy has been thrown into considerable uncertainty following yesterday’s shock election result. For now we are sticking with our view that rates will remain on hold until the end of the year. The biggest risk to the outlook is that a post-election slump in investment causes growth to slow, prompting the central bank to loosen policy.