Thursday, April 20, 2006


There has been much talkabout on Malaysia's interest rate recently and how the bond market is fluctuating away. Had a look at two yield curves for two periods, a 1 month interval. Yes...the yields are rising and bond prices are falling. The central bank will review its monetary policy on this Tuesday and many are anticipating anther 25 basis points hike. With so much anticipation eversince the last hike, I think the impact of a possible hike has already been impounded in bond prices. Say if the central bank decides not to hike its OPR this round, a hike in its next meeting on May 22 will be inevitable amid high oil prices fanning inflation. I believe the possibility of a rate hike has also made BNM cancelled its 2m and 3m repo tenders and the reason quoted was unfavorable rates.


Post a Comment

Subscribe to Post Comments [Atom]

<< Home