KUALA LUMPUR, Dec 12 (Bernama) -- Bursa Malaysia’s key index closed higher today on bargain hunting, in line with positive investor sentiment across regional markets, consolidating at its highest level in more than two months — a level last seen on Oct 2, 2025. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 12.42 points, or 0.76 per cent, to 1,637.81, compared with Thursday’s close of 1,625.39. The benchmark index opened 2.83 points lower at 1,622.56, thereafter edged down to an early low of 1,622.03, before staging an uptrend to an intraday high of 1,640.36 in late trading. Market breadth was positive, with gainers trouncing decliners at 743 versus 387. Another 530 counters were unchanged, 1,108 untraded, and 16 suspended. Turnover increased to 3.09 billion units worth RM2.46 billion from 2.99 billion units worth RM2.35 billion on Thursday. Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the FBM KLCI ended higher on continued...
Key Takeaway: The Reserve Bank of New Zealand (RBNZ) delivered a larger-than-expected 50-basis-point rate cut to 2.50%, underscoring growing concern over the country’s fragile economy and keeping the door open for further monetary easing.
Policy Decision
The RBNZ lowered its Official Cash Rate (OCR) by 50 bps to 2.50%, exceeding market expectations for a smaller move.
In its statement, the central bank said it remains “open to further reductions” to support inflation sustainably near the 2% midpoint of its target range.
The move marks the latest step in an aggressive easing cycle that has seen the RBNZ cut rates by 300 bps since August 2024, as growth momentum stalls and inflation remains within the 1–3% target band.
Market Reaction
| Asset | Latest | Move |
|---|---|---|
| NZD/USD | 0.5745 | -0.90% |
| 2-year swap rate | 2.521% | ↓ from 2.619% |
The New Zealand dollar weakened sharply, falling nearly 1% against the U.S. dollar, while short-term swap rates also declined as traders priced in the likelihood of additional stimulus in the coming months.
Analysts’ View
The rate cut caught 15 of 26 economists in a Reuters poll by surprise, as they had expected a smaller 25-bp move. The remaining 11 forecast the actual 50-bp cut, noting that policymakers might act decisively amid weak domestic demand.
ASB Bank chief economist Nick Tuffley said the decision shows the RBNZ placed greater weight on downside inflation risks and the economy’s sluggish rebound.
“The likelihood of inflation pressures being weaker than previously anticipated carried more weight than waiting to see how quickly the economy rebounds,” Tuffley noted.
Political and Economic Context
The move offers political relief to Prime Minister Christopher Luxon, whose government has faced criticism over an unfulfilled recovery narrative.
Households remain cautious amid rising living costs and a soft labor market, while consumer sentiment continues to deteriorate. Luxon has publicly advocated for lower borrowing costs to stimulate spending and investment.
Outlook
With inflation now contained and growth momentum fragile, analysts expect the RBNZ to maintain a dovish stancethrough 2026, keeping further cuts on the table.
Key watchpoints:
Upcoming inflation and employment data.
Fiscal policy coordination under Luxon’s government.
Global monetary easing trends, particularly from the Federal Reserve and Reserve Bank of Australia.
Bottom line: The RBNZ’s bold 50-bp cut signals policymakers’ readiness to act aggressively to revive growth — and markets are betting this won’t be the last.
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