PETALING JAYA: As Malaysia fell into deflation territory for the second month amid a slowdown in the economy, this could provide more support for a potential reduction in Bank Negara Malaysia’s (BNM) Overnight Policy Rate (OPR) soon, analysts say. In a report, AmBank Research said the weak underlying inflationary pressure combined with the risk of a slower economic outlook provides the central bank with a strong case for monetary policy easing. “The question is whether BNM will move ahead of the curve or otherwise,” it said. BNM’s next Monetary Policy Committee meeting is scheduled to be held on May 7. The central bank has maintained the OPR at 3.25% since it was last revised upwards by 25 basis points in January 2018. Last Friday, the Statistics Department announced that the consumer price index (CPI) fell 0.4% in February, compared with a decline of 0.7% in the previous month. Average inflation for the first two months fell 0.6% year on year . “The … [Read more...] about Monetary policy easing looms as deflationary pressures linger?
Monetary policy committee
BEIJING: China's central bank said on Thursday (Dec 27) it will maintain a prudent monetary policy and keep the Chinese currency basically stable while offering "reasonably ample" liquidity to the market.A statement following a quarterly meeting of its monetary policy committee did not include the previously-used "neutral" to describe Chinese policy - an omission that could indicate a greater bias for easing at a time growth is slowing.Also, the latest statement did not include a reference to China's deleveraging campaign. Three months ago, the People's Bank of China (PBOC) said it would control the intensity and pace of its structural deleveraging campaign."A prudent monetary policy should be more focused on being neither too tight nor too loose," the central bank said in the Thursday statement posted on its website."(China) will make monetary policy more forward-looking, flexible and targeted," it said.Market analysts expect the PBOC to keep policy relatively loose to support China's … [Read more...] about China central bank pledges prudent monetary policy and a stable yuan
The Bank of Thailand's rate-setting panel kept the policy rate unchanged yesterday as widely expected, saying purchasing power has improved, albeit at a gradual pace, and the economic recovery is picking up speed. The Monetary Policy Committee (MPC) voted unanimously to leave the policy rate unchanged at 1.50%. The benchmark rate has been held unchanged since a 25-basis-point cut in April 2015."In deliberating their policy decision, the committee assessed that the Thai economy continued to gain further traction, driven by growth in the external sector as well as gradual improvement in domestic demand," the central bank said. "The committee viewed that the current accommodative monetary policy stance remained conducive to the continuation of economic growth and should foster the return of headline inflation to target, although the process could take some time. Thus, the committee decided to keep the policy rate unchanged at this meeting."The Bank of Thailand's inflation target range is … [Read more...] about Policy rate unchanged to foster growth
Malaysia’s central bank on Thursday raised its key interest rate for the first time in three and a half years, at a time inflation has crept up and growth is robust.Bank Negara Malaysia (BNM) hiked its overnight policy rate by 25 basis points to 3.25 percent.The central bank said its monetary policy committee “decided to normalise the degree of monetary accomodation” as the economy remains firmly on a steady growth path.A slim majority of economists in a Reuters poll – six out of 10 – had predicted the hike.The last time BNM changed its key rate was in July 2016, shortly after Britain’s Brexit vote, when it made a 25 basis point cut.Until Thursday, the last BNM hike was in July 2014, when the key rate was increased to 3.25 percent. … [Read more...] about As expected, Bank Negara raises policy rate to 3.25%
The Bank of Thailand said on Thursday its Monetary Policy Committee (MPC) thought monetary policy should remain accommodative to support economic growth and help inflation get back to the target range. The BoT forecast headline inflation at 1.1% for 2018, and for consumer prices to return to the 1-4% target range in the first half of the year, it said in an open letter to Finance Minister Apisak Tantivorawong to clarify why inflation was below the target last year.The headline inflation rate was 0.66% in 2017.The central bank cited structural and supply-side factors, including lower food prices, as among the factors.The BoT has left its policy interest rate unchanged at 1.5%, near record lows, since April 2015.The MPC next reviews monetary policy on Feb 14.The central bank has forecast economic growth of 3.9% for both 2017 and 2018. Official 2017 GDP data is due on Feb 19. … [Read more...] about Monetary policy should remain accommodative: BoT