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 (May 2): The FBM KLCI fell 18.34 points or 0.98% today, as investors turn cautious in anticipation of US Federal Reserve's policy decision, while awaiting US jobs data for fresh cues.
At 5pm, the benchmark index slid to 1,852.03 points, though the small-cap index held firm with a marginal 0.05-point slip, ending the day at 14,579.9 points.
"I think it is rotational. Fund managers have possibly repositioned themselves to take advantage of the small- and mid-cap stocks after seeing emerging values," said Rakuen Trade Sdn head of research Kenny Yee when contacted.
Yee said while it is widely expected that the US is not looking to hike interest rates, all eyes are on its upcoming policy statement to gather clues on the future pace of US monetary tightening.
Reuters reported that the policy-setting Federal Open Market Committee is scheduled to release a statement early Thursday, while the US latest jobs data are due Friday.
Investors are betting that the Fed is likely to keep rates steady this month, but will likely encourage expectations that it will lift borrowing costs in June, on the back of rising inflation and low unemployment.
In Malaysia, a total of 2.1 billion shares worth RM2.44 billion crossed on the back of a largely negative market breadth. A total of 551 counters declined, outstripping 311 advancers.
Index-linked Nestle (M) Bhd and Hong Leong Financial Group Bhd led the fall today, with Nestle shares shedding RM4.90 or 3.55% to RM133.10, while the latter lost 44 sen or 2.26% to settle at RM19.04.
Other regional bourses also closed lower: South Korea's Kospi slipped 0.39%, while Japan's Nikkei 225 edged down 0.16%. In China, the Shanghai Stock Exchange Composite Index saw a slight weakening with a 0.03% decline, while Hong Kong's Hang Seng Index fell 0.27%.
Source: The Edge
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