Currency manipulator view on Malaysia ‘over-exaggerated’ – AmBank Research

Currency manipulator view on Malaysia ‘over-exaggerated’ – AmBank Research
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KUALA LUMPUR (Nov 5): AmBank Group Research said the view of Malaysia being a currency manipulator could be over-exaggerated.

In a thematic global markets report today, AmBank group chief economist and head of research Dr Anthony Dass said the US Treasury is due to release its report on foreign currency, manipulators soon.

He said Malaysia, Singapore, and Vietnam, which were cited for the first time in May, are expected to be on the watch list.

Dass, who is also adjunct professor in economics at University of New England, Sydney, Australia, said out of the three criteria set by the US Treasury, Malaysia meets two as a currency manipulator.

However, Dass said the issue of the persistent “one-sided” intervention may not be serious.

He explained that on the current account of the balance of payment, with commodity exports playing a crucial role in influencing our trade surplus, Malaysia is more impacted by the movement of global market forces as compared to the exchange rate.

“As for manufactured surplus, with export-oriented multinational corporations here, the current account surplus shows that the economy is diversified.

“Therefore, the view of Malaysia being a currency manipulator could be over-exaggerated,” he said.

Dass added that even if Malaysia is being viewed as a currency manipulator by the US Treasury, under a 2015 law, Washington will need to spend a year to resolve the problem through negotiations.

“Only if those talks fail, can the US take a number of small steps in retaliation, including stopping the US Overseas Private Investment Corp, a government development agency, from financing any program in Malaysia,” he said.