KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Slowing inflation in Singapore has created some room for the Monetary Authority of Singapore (MAS) to ease monetary policy in January, but analysts believe the central bank may delay any action until later in 2025 to better assess the impact of US President-elect Donald Trump's policies.
Key Highlights
Inflation Outlook
- November core inflation is expected to hold steady at 2.1%, a three-year low, according to analysts in a Reuters poll.
- MAS has forecast core inflation at around 2% for Q4 2024, with DBS Bank predicting it to average 1.8% in 2025.
Monetary Policy Approach
- Singapore uses the Singapore dollar nominal effective exchange rate (S$NEER) to manage policy, adjusting the slope, midpoint, or width of the currency band.
- While some analysts expect an easing at the January review, a MAS survey showed the number of economists anticipating a reduction in the S$NEER slope dropped from 50% to one-third.
Analyst Perspectives
- DBS Bank: MAS is unlikely to ease in January and may wait to see Trump's policies in action.
- "Chances are MAS will mirror the Fed in basing decisions on actual policies rather than speculation," said DBS economist Chua Han Teng.
- Moody’s Analytics: MAS may wait for core inflation to fall below 2% for a few months before easing, giving time to assess global trade disruptions from US tariffs.
- Maybank: MAS could reduce the slope in January, as lower import prices from Trump’s tariffs on China may lead to a deflationary shock and further ease inflation.
Growth Projections
- Maybank’s Chua Hak Bin: Expects Singapore’s growth to slow to 2.6% in 2025 from 3.6% in 2024 amid trade flow disruptions.
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