BNM benchmark rate slashed from 3.25% to 3%; Base Rates; International Reserves; Bonds; Ringgit; EMEAP; (Updated Jul 15, 2016)

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2nd policy meeting (12th overall) under new BNM Governor Muhammad Ibrahim’s helm today July 12th, 2016.

Malaysia’s Overnight Policy Rate (OPR) reduced 25 basis points to 3.00% upon announcement on Monetary Policy Statement on July 13th, 2016. Ceiling and floor rates for the OPR are correspondingly reduced to 3.25% and 2.75% respectively

This is in response to Brexit & to boost the domestic economy. This is the first rate slash since Feb 2009.

 

BNM Key Details

  • Governor (8th): Muhammad Ibrahim (eff. May 1st, 2016); Prev Deputy Governor; Replacing Tan Sri Dato’ Sri Dr. Zeti Akhtar Aziz
  • Deputy Governor:  En. Shaik Abdul Rasheed (eff. July 16th, 2016); Prev Asst Governor
  • Jul 1: East Asia Pacific central banks reinvest Asian Bond Funds closing USD denominated bond funds
    Objective: to support local-currency bond market development & diversify reserves management

 

Post OPR Updates

  • BNM says no plans for further cuts
  • Maybank cuts its base rate by 20bps from 3.20% to 3.00%
  • Property sector & REITS rise while banking stocks decline

 

Base Rates

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BNM International Reserves

  • Jun 30: International reserves of BNM at RM390.4b (USD97.2b)
  • Decline in reserves level mainly due to quarterly adjustment for forex revaluation
  • Reserves sufficient to finance 8.1mths retained imports & is 1.2x short-term external debt

 

Bond & Sukuk

  • 1H16: Maybank becomes #1 bond & sukuk market shareholder (Prev RHB)
  • #1: Maybank: 26.1%
  • #2: CIMB: 25.0%
  • #3: AmInvest: 17.6%
  • #4: RHB: 17.2%
  • #5: Kenanga Investment Bank: 3.4%
  • #6: Public Investment Bank: 3.3% (Prev #14)

 

Ringgit

  • Jul 11: USD to MYR at 3.979
  • 1 week high: 4.063
  • 1 mth high: 4.099
  • 3 mth high: 4.152
  • 6 mth high: 4.420
  • 1 yr high: 4.456