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...
KUALA LUMPUR (Jan 3): The FBM KLCI fell 6.2 points or 0.4% as investors took profit in stocks like Axiata Group Bhd and Malayan Banking Bhd (Maybank), following 2016 year-end window-dressing gains.
At 5pm today, the KLCI closed at 1,635.53 points. Axiata dropped 20 sen to RM4.52, while Maybank fell 19 sen to RM8.01.
KLCI-linked Axiata and Maybank were Bursa Malaysia's seventh and eighth-largest decliners, respectively. Across Bursa Malaysia, 1.67 billion shares worth RM1.07 billion were exchanged.
“The KLCI is seeing a correction after last week’s window-dressing gains," Areca Capital Sdn Bhd chief executive officer Danny Wong told theedgemarkets.com.
"Blue-chip counters like Maybank and Axiata were pushed at the last minute last week, so now, it’s coming back down again,” Wong said.
In currency markets today, the ringgit weakened to a fresh one-year level against a strengthening U.S. dollar at 4.4940. At 4:54pm, the exchange rate stood at 4.4938.
The ringgit is contending against a strengthening U.S. dollar, in anticipation of U.S. interest rate hikes in 2017.
In Malaysia, Wong said the exchange rate was stabilising at between 4.4800 and 4.4900.
“The ringgit seems to be stabilising at the current level. It has decoupled from crude oil prices over the past few months and when this relationship resurfaces, the ringgit will be seen as undervalued,” he said.
Source: The Edge
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