Pressure mounts for MYR depreciation

BNM has been defending USD/MYR at 3.805-3.81 levels for almost 3 weeks now and has spent a lot of precious reserves in doing so. Malaysia reported a considerable decline of USD5bn (USD105.5bn to 100.5bn) in FX reserves for the first two weeks of July. 
In fact, anecdotal evidence suggests that current reserves might have already dipped below the psychologically big level of USD100bn. 

According to Bank of America, this increasing pressure for MYR depreciation is visible on two fronts. 

• First, the bank's FX Exchange Market Pressure index that weights FX reserves, interest rates and FX spot movement into a single index to gauge pressure shows  that depreciation pressure has been sustained. 
  
  
• Second, the bank's estimated FX value-adjusted FX reserve position for Malaysia shows that the underlying numbers are showing significant deterioration, even adjusting for the valuation impact that a stronger USD has on the valuation of Malaysia EUR and JPY reserve holdings.