Rate Hike Expectations Build in Malaysia Over Next 12 Months

Fixed-income investors are positioning for higher interest rates in Malaysia, defying forecasts for a hold as the economy grows at nearly the fastest pace in the region.

Ringgit interest-rate swaps are starting to price the chance of a rate hike in the coming months, establishing Bank Negara Malaysia as a hawkish outlier in Southeast Asia. This shift contrasts with regional peers where most central banks are expected to stay on hold or cut rates further.