Malaysia's BNM likely to be on hold through 2016

Bank Negara Malaysia (BNM) Governor Zeti in her press conference clearly indicated that monetary policy conditions remain accommodative, and that MYR weakness owed largely to slower growth in China, imminent rate hikes in US and adverse terms of trade. 

BNM might remain moderately dovish and observe risks centred on the external environment. Against a weaker currency backdrop and slowing growth, BNM is likely to stay on hold through 2016. 

"Although we believe downward pressure on the MYR will prevent BNM from cutting rates, we expect the bank to maintain a cautious stance", says Barclays in a research note.