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 (Sept 10): The FBM KLCI slid 0.44%, dragged by glove makers’ continued sell-off, while Malaysian shares drifted lower as investors digested Bank Negara Malaysia’s decision to maintain its policy interest rate at 1.75%.
Having taken cue from the overnight rally in Wall Street to open at its intra-day high of 1,504.03 points, the benchmark index retreated in mid-morning and hovered in the red to close down 6.6 points to 1,490.12 points.
KLCI’s biggest decliners were Hartalega Holdings Bhd (down RM1.12 or 8.62% to RM11.88), Top Glove Corp Bhd (down 70 sen or 9.79% to RM6.45) and Petronas Dagangan Bhd (down 40 sen or 1.89% to RM20.78).
Elsewhere in Asia, Japan’s Nikkei 225 gained 0.88%, South Korea’s Kospi rose 0.87% while Hong Kong’s Hang Seng Index fell 0.64%.Malaysia’s Central Bank announced at 3pm today that it will maintain the overnight policy rate (OPR) at 1.75%. Street consensus had been split, with half of research houses expecting another 25 basis point cut as the nation is still recovering from the COVID-19-induced downturn.
“The cumulative 125 basis points reduction in the OPR this year will continue to provide stimulus to the economy,” BNM said in a statement.
“Given the outlook for growth and inflation, the Monetary Policy Council considers the stance of monetary policy to be appropriate and accommodative,” it added.
A senior market analyst opined that the decision also contributed to today’s negative market sentiment in Bursa Malaysia.
“People in the street are seeing it tough. The Central Bank may be maintaining the OPR unchanged ahead of FTSE Russell’s upcoming review of the World Government Bond Index to maintain the inclusion of our Government’s bonds,” said the analyst.
“There is still another MPC meeting in November to look out for,” the analyst added.
Across the wider Bursa Malaysia, market breadth was negative with 1,023 decliners against 200 gainers, while 293 counters traded unchanged. The FBM Emas Index fell 1.09%, while the ACE Index fell by a steeper 5.39%.
Overall volume stood at 8.4 billion shares, with total turnover at RM5.49 billion.
Glove makers emerged as top decliners led by Supermax Corp Bhd (down RM1.38 or 18.45% to RM6.10), Kossan Rubber Industries Bhd (down RM1.26 or 11.5% to RM9.70), and Hartalega.
Gainers were led by Kuala Lumpur Kepong Bhd (up 58 sen or 2.59% to RM22.90), Time DotCom Bhd (up 58 sen or 2.6% to RM11.72) and Tenaga Nasional Bhd (up 32 sen or 2.86% to RM11.50) and PPB Group Bhd.
Top active counters were XOX Bhd, Pegasus Heights Bhd and Top Glove.
Source: The Edge
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