The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
A lot of us Malaysians are probably upset with the depreciation of the Ringgit.
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| Weakened Ringgit |
The Ringgit has weakened to multi-year low and breached the previous low of RM3.73 to the USD and according to a lot of research, it is inching towards the pegged level of RM3.80/USD.
This morning, while I was driving to work, I heard from BFM on their discussion. Apparently, our foreign reserve exchange is stand at an estimate of around 100 billion USD.
If you're like me, you'll probably feel the pinch as I'm earning in RM. To talk about travelling would be a pain in the ass now because I'll have to fork out more most of the time. I suspect gadgets like Apple products might see another increase if the drop in the currency continues. Even then, Zeti insist that the RM is still strong and it's only at this level due to negative sentiments. I'm not sure if I'm buying it but as Ringgit continues to weaken, perhaps it's time to look at who's the biggest winners and losers in it.
BIGGEST WINNERS
Reading from The Star Online, Hong Leong Investment Bank (HLIB) Research expects the gaming sector, rubber products and technology stocks to be the main beneficiaries of the weaker ringgit.
Gaming - revenue from US operations
Rubber Products - most sales in USD while cost in Ringgit
Sea Transportation - almost all revenue in USD while there is a small portion of costs in Ringgit
Tech – majority sales in USD, partly offset by raw material cost in USD, outweigh US loan.
BIGGEST LOSERS
Automotive - higher cost of imported materials & CKD costs
Air Transportation - higher fuel cost
Power - higher coal cost & USD debt
Telco - US$ debt
Well, whether we like it or not, the weakened Ringgit is here, and maybe it's time to think of how you can put your weakened Ringgit to help you add value. Perhaps some investment in stocks? Or maybe property? Well, if nothing else, I might as well spend it, at least my consumption power is stronger at present. What say you?
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