Yields down on increasing calls for further easing as COVID-19 pandemic weakens economic prospects
Yields on Malaysian Government Securities (MGS) across the curve continued to tighten in February as economic sentiment moderated following the release of the 4Q2019 GDP numbers and the government’s downgrade Malaysia’s GDP growth pace to between 3.2% to 4.2%. These events gave support for the current low yield levels and raised expectations of further easing in the overnight policy rate (OPR). The risk-off sentiment is further strengthened by the relentless spread of the COVID-19 outside China and the government’s announcement of a stimulus package for 2020.
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