SINGAPORE (July 18): Malaysia's inflation just dipped to its slowest pace in more than three years, further muddying the policy outlook and giving ringgit holders fresh reasons to consider offloading the currency.

Analysts were already marking down the ringgit because of a stronger dollar, ballooning Malaysian debt and lingering uncertainty about the new government's tax and spending policies.

If sinking inflation does drive down the ringgit that will put central bankers in even more of a pickle, tempting them to tighten policy to protect the currency at the same that growth and prices suggest the economy is more likely to need policy
easing.

Adding to the confusion, Bank Negara doesn't have a target range for inflation, unlike its peers in the region, That adds to the difficulty for investors trying to judge what the policy reaction will be.