The Malaysian Ringgit gained over 0.5% against the Australian Dollar on Tuesday, after Malaysia’s annual inflation rate was reported at its highest level since October 2024 in April.
At the same time, hawkish messaging from the Reserve Bank of Australia provided limited support to the Aussie.
Annual headline inflation in Malaysia has accelerated to 1.9% in April from 1.7% in March, in line with market consensus.
Upward price pressure came from food & beverages (up 1.2% YoY), alcoholic beverages and tobacco (up 2.8% YoY), housing (up 1.1% YoY), transport (up 4.1% YoY), health (up 1.4% YoY), information and communication (up 2.0% YoY) and financial services (up 4.9% YoY).
Malaysia’s core inflation, which excludes fresh food and administered prices, has eased to 2.0% in April from 2.1% in March.
Meanwhile, the minutes from the Reserve Bank of Australia’s May policy meeting indicated that eight of the nine board members favored raising the cash rate to 4.35%, citing mounting inflation risks stemming from the Gulf conflict.
Earlier, RBA Assistant Governor Sarah Hunter warned that the central bank was concerned higher energy prices could quickly filter through to consumer prices, potentially leading to a “significant shift in inflation expectations.”
These signals have reinforced market expectations of another rate hike at the RBA’s August meeting.
The AUD/MYR currency pair was last down 0.65% on the day to trade at 2.8324.
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