US Fed's potential rate hike unlikely to hurt Malaysia property market

According to a new analysis by Juwai IQI co-founder and group chief executive officer Kashif Ansari, Malaysia is well-positioned for economic growth and improving real estate market.

"Malaysia's significant current account surplus will help insulate the economy from rising rates in the US.

"The country has earned more from its exports than it has paid for imports since 1997 and has maintained this surplus during the pandemic," he said in a statement today.

Ansari noted that Malaysia does have significant external debt, which could be risky at a time when the ringgit is falling, but the spending that helped contribute to that debt is what helped Malaysian families and companies survive the worst of the pandemic.

"Because of that spending, we are better placed for an economic rebound," he said, noting that Malaysia has significant foreign exchange reserves, better than all but 14 other comparable emerging market economies.

Malaysia's overall resilience to rate increases places it at about the middle of the pack among similar countries, and its resilience is much higher than countries such as India, Chile, Turkey and Brazil, he said.

"We believe international demand for Malaysian exports will continue to increase in 2022 due to fast economic growth in the US and the rebalancing of supply chains.

"This will help offset any negative impact from rising rates," he added.

The US Federal Open Market Committee (FOMC) first meeting for this year is scheduled for Jan 26.