KUALA LUMPUR, May 21 (Bernama) -- Bursa Malaysia ended at its intraday low on Thursday as investor sentiment remained cautious amid ongoing foreign outflows, although the recent weakness may present bargain-hunting opportunities in fundamentally sound blue-chip counters. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 9.33 points, or 0.54 per cent, to 1,708.36, from yesterday’s close of 1,717.69. The benchmark index, which opened 3.74 points higher at 1,721.43, hit an intraday high of 1,722.50 in early trade before losing momentum for the rest of the day. Market breadth was negative, with losers outpacing gainers 656 to 508, while 565 counters were unchanged, 989 untraded and 32 suspended. Turnover fell to 3.49 billion units worth RM3.70 billion compared with 4.15 billion units worth RM4.29 billion on Wednesday.
Simple Summary
China’s key one-year bank funding rate has fallen to a record low
PBOC charged some banks as little as 1.5% on policy loans in January
Move lowers borrowing costs without headline rate cuts
Signals continued, low-key support for economic growth
What Happened
China’s central bank, the People’s Bank of China, allowed the interest rate on its one-year medium-term lending facility (MLF) to fall to as low as 1.5% in January, down from 1.55% in December, according to people familiar with the matter.
That compares with an official MLF rate of 2% a year ago, before the PBOC stopped publishing a single benchmark rate.
Why This Matters
Lower funding costs for banks, encouraging lending
Supports an economy facing deflationary pressure and a prolonged property slump
Helps stabilise bank net interest margins, which have been under strain
Key point: This is another example of Beijing’s “drip-feed” stimulus approach, easing conditions quietly rather than with big headline-grabbing moves.
How the Policy Works Now
Since March 2025, banks bid for MLF funds at different rates
PBOC no longer publishes a single MLF rate
The central bank now prioritises 7-day reverse repos as its main policy tool
The new benchmark short-term rate has eased to 1.4%, down 10 basis points
Liquidity Still Flowing
The rate cut coincided with:
900 billion yuan of MLF loans in January
A record injection of longer-dated liquidity, including 3-month and 6-month reverse repos
This suggests policy easing is continuing through liquidity management rather than formal rate cuts.
Bottom Line
China is loosening financial conditions quietly but persistently.
By allowing key bank funding rates to drift lower, the PBOC is supporting growth while avoiding aggressive stimulus — reinforcing its preference for gradual, controlled easing.
Key Takeaways
MLF borrowing cost hit a record low
No big-bang stimulus — easing remains subtle
Banks and growth-sensitive sectors benefit
More incremental support likely ahead
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