Friday November 20, 09:24 AM
INSTANT VIEW 2-Malaysia's price fall slows, rates to be on hold
KUALA LUMPUR, Nov 20 (Reuters) - Malaysia's consumer price index in October fell for the fifth straight month at a slower pace.
October CPI dropped 1.6 percent from a year ago, beating analyst expectations of a 1.4 percent decline, but came in slower than the 2 percent fall in September.
For table on CPI (NYSE: CPY - news) and its components, click on
The central bank is expected to keep interest rates steady at 2 percent at its next policy meeting on Tuesday.
MARKET REACTION:
- The Kuala Lumpur stock exchange closed 0.2 percent lower at 1,274.36 points when the data was issued.
- For Malaysian five-year bonds, click on.
ANALYST COMMENTS: JOANNA TAN, ECONOMIST, FORECAST PTE LTD
'It is of no surprise that inflation headline prints are starting to edge higher. Looking ahead, high base effect from the year before will pass by December and we should see positive inflation prints before year-end.'
'Nonetheless, headline prints are still mild and the priority remains the recovering economy at this juncture. Next week should see the central bank deliver a rate hold.'
ALVIN LIEW, ECONOMIST, STANDARD CHARTERED (LSE: STAN.L - news)
'The main culprit for the deflation was still the negative base effect from the high transport cost (from a year ago), which could continue to keep Malaysia in deflation till end 2009.
We reiterate that this bout of deflation experienced by Malaysia is temporary, and we expect inflation to return when the transport cost base effect wears out as early as January 2010.
But inflation in 2010 should come in at very benign levels, as we do not see any significant domestic price pressures at the moment.'
(Reporting by Soo Ai Peng; Editing by Niluksi Koswanage)
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