KUALA LUMPUR (July 10): The Malaysian central bank is unlikely to make any changes in its monetary policy during the Monetary Policy Committee (MPC) meeting tomorrow, according to FXTM, a global forex broker, despite the decline seen in the ringgit.

Jameel Ahmad, FXTM's global head of currency strategy & market research, told reporters today he sees no need for Bank Negara Malaysia (BNM) to make any changes at this juncture.

"My overall view is there's no need for [the monetary] policy to change at this time. There's fragility in the market but it's not within Malaysia itself," he said.

Jameel believes there is room for flexibility at this point for the new governor Datuk Nor Shamsiah Mohd Yunus — who just assumed office at the beginning of this month — in determining the policy direction, adding Malaysia is in a better position than most of its Southeast Asian peers.

Unlike in Indonesia and Philippines, where there is a need for the central banks to ramp up rate hikes to defend their currencies, the Malaysian ringgit has been one of the best performing currencies in the region, he noted.

The decline seen recently has been driven mainly by uncertainties on the external front as US officially imposed a 25% tariff on US$34 billion goods from China last Friday, which was quickly met with retaliatory tariffs from Beijing.

Jameel, however, cautioned that inflationary pressure could be seen in the second half as the weakened ringgit against the US dollar could lead to an increase in prices for imported goods.

Jameel's view that BNM will hold its benchmark overnight policy rate (OPR) at 3.25% echoes the consensus view obtained by Bloomberg from 19 economists, who all predicted that the new governor will keep the OPR unchanged in her first interest rate meeting.