Malaysia’s recent inclusion in a United States’ currency manipulators’ watchlist is a subtle American way to discourage trade with China and boost US trade.
A “classic case” of protectionism.
This move is to isolate competing trading partners who pose a threat to the US.
However, it is not expected to have a significant impact due to the country’s good trade policy, reputation for economic and exchange rate flexibility, as well as huge external balance.
“True that market typically buys the dollar on fears of no trade deal, etc. But trade tensions can also hurt US growth, jobs creation and financial markets,” said Saktiandi Supaat, head of FX research at Maybank in a report.
For now, Malaysia is a safe haven for the trade war.