Dec 23 2014, 12:17 AM
http://www.rhbbank.com.my/Whats_New/deposi...t-FD-rates-now/
QUOTE(cherroy @ Dec 22 2014, 09:47 PM)
1. GST inflation factor is one off, BNM won't act on one off event, as the raising rate effort is useless to cope the inflation by one off event.
2. Price increases has a lot to do with subsidies cut/abolished, again this is one off event, raising interest rate won't curb this kind of inflation.
So this 2 factor won't be the sole/main consideration when BNM deciding on rate.
Raising interest rate will only curb inflation, if the inflation is demand pull factor.
Cost higher due to 1&2 is a push factor, which even you raise interest rate to 10%, the price still need/will go up.
The pressure of rate hike is not that great at the moment, if
a. Household debt is not raising further.
b. Inflation is not running wild away due to high demand by consumer.
c. RM is not depreciated too greatly, in fact RM appreciated against AUD, NZD, Yen.
d. Foreign currency reserves is not depleting rapidly,due to current account deficit (now still surplus)
1. Understood on GST being a one-off effect but we will have to watch for how long the effect lasts.2. Price increases has a lot to do with subsidies cut/abolished, again this is one off event, raising interest rate won't curb this kind of inflation.
So this 2 factor won't be the sole/main consideration when BNM deciding on rate.
Raising interest rate will only curb inflation, if the inflation is demand pull factor.
Cost higher due to 1&2 is a push factor, which even you raise interest rate to 10%, the price still need/will go up.
The pressure of rate hike is not that great at the moment, if
a. Household debt is not raising further.
b. Inflation is not running wild away due to high demand by consumer.
c. RM is not depreciated too greatly, in fact RM appreciated against AUD, NZD, Yen.
d. Foreign currency reserves is not depleting rapidly,due to current account deficit (now still surplus)
2. As for petrol price going down, it still remains uncertain on its effect but logically, prices of goods should come down.
Bottomline is probably everyone here is hoping interest rates will go up sometime next year.
Quote
Reported last week. 
Thousand Apologies 
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