Ringgit's resilience under threat as case for rate cut grows

Malaysia’s ringgit was sheltered from the worst of last month’s emerging-market selloff, thanks to higher oil prices. It may be about to make up for lost time.

Traders will be hovering over the sell button after Wednesday’s policy meeting in case the central bank shows any sign of turning dovish due to the worsening US-China trade dispute and the new government’s decision to cut back on infrastructure spending to trim its debt burden.

The rally in oil prices is also in danger of peaking after Opec and its partners agreed last month to boost output, and US President Donald Trump lashed out at the group for not doing enough to reduce gasoline costs.

While central banks in Indonesia, the Philippines and India have all raised rates in recent months to bolster their currencies, Malaysia may end up doing the opposite.