Malaysian ringgit under pressure in medium-term on likelihood of shrink in current account surplus, says Commerzbank

The Malaysian ringgit is expected to remain under pressure to weaken from medium-term perspective as the current account surplus is likely to shrink over the coming years, according to the latest research report from Commerzbank.

Finance Minister Lim Guan Eng revealed the first budget report under the administration of 93 years old PM Mahathir, which gives a clear signal that the government is committed to delivering a decent growth.

The government aggressively revised up the budget deficit to 3.7 percent of GDP, from the initial estimation of 2.8 percent. While the government projects a slightly lower budget deficit for 2019 to 3.4 percent of GDP, the fiscal deficits for 2018 and 2019 will be a notch higher than the levels seen in 2015 to 2017 that is around 3.0 percent, indicating that the expansionary fiscal policy is on the way, the report added.