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Foreign capital inflows to Malaysia are expected to rebound as US interest rate differentials bottom out, with central bank easing being the key catalyst. Foreign allocations to Malaysian bonds are low, with foreign equity outflows reaching US$6 billion in 2023.
Bank Malaysia’s chief economist said monetary easing is expected to attract foreign investment, with emerging currencies such as the ringgit benefiting. Standard Chartered expects the ringgit to outperform the market at 4.40 against the US dollar in 2024.
However, high US policy rates and a possible rate cut by the ASEAN central bank have limited the upside for the ringgit. Independent economists said that global economic stability and a good domestic economic outlook will drive capital inflows, helping the ringgit and the stock market to rise.
(Source: nst Image source: freepik)
