Ringgit declines for second week as BNM holds

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SINGAPORE (Jan 25): Malaysian ringgit is poised to decline for a second week versus dollar after Bank Negara Malaysia left rates unchanged as expected Thursday.

* USD/MYR steady at 4.1450 as currency pair hovers under 100-day moving average resistance, currently at 4.1549

* Malaysia’s central bank left its benchmark interest rate unchanged at 3.25%, giving little indication of whether it sees room to ease policy amid subdued inflation and weak economic growth

** Nation’s CPI in December was +0.2% y-o-y vs est. +0.3%

** There’s a growing chance that Bank Negara Malaysia may ease policy due to a global slowdown and disinflation risks, although the central bank will probably remain on hold for the next few months to assess the outlook, according to Scotiabank

* Malaysian investigators have uncovered details of how fugitive financier Jho Low could have made financial gains from the entity that predated scandal-plagued state fund 1MDB, through a bond sale involving local bankers and a Thai brokerage

* The police have asked law firms to turn over documents related to 1MDB bond sales that Goldman Sachs Group Inc arranged, as part of an investigation involving the US lender

* Overseas investors were net buyers of US$25.5 million in local equities on Jan 23

* Nation’s 10-year yield rose 1bp to 4.089%