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  • Oil markets open up weak following record US stockpiles
    Oil prices opened up weak on Thursday in Asia after record US stockpiles sent it tumbling to near six year lows in the previous session, and analysts said that the outlook remained weak.

    US crude prices tumbled on Wednesday after the US reported record-high inventories that raised anxieties about the global oil glut that had pressured the market since last summer.

    The US Energy Information Administration (EIA) said domestic crude oil stocks rose by almost 9 million barrels last week to reach nearly 407 million, their highest since the government began keeping records in 1982. "The market expects stockpiles to keep rising, pushing front-month prices further down as refineries enter maintenance season and are likely run at lower utilisation rates," ANZ said in a morning note on Thursday.

    Thursday's markets opened up close to their previous settlement levels, and analysts said the outlook remained weak.
    Brent crude was trading at US$48.60 a barrel at 0131 GMT, US crude was at US$44.43 a barrel, both close to six year lows.

    Swiss bank UBS said in a note on Thursday that cheap oil would not have a major boosting impact on Asian economic growth. "Big, big drops in oil; small effects on economies... Cheap oil should give a small boost to Asian GDP, but not really enough to warrant major changes in growth forecasts," it said.

    Researchers at Energy Aspects said in a note that "a new normal is in the making for China-slower and less oil intensive growth".

    They added that "oil consumption in China will become more efficient, leading to slower demand growth of around 0.2-0.3 mb/d (million barrels per day) compared to expectations of above 0.5 mb/d."

    Oil markets open up weak following record US stockpiles
    Oil prices opened up weak on Thursday in Asia after record US stockpiles sent it tumbling to near six year lows in the previous session, and analysts said that the outlook remained weak.

    US crude prices tumbled on Wednesda...See more
  • Ringgit falls as Asia's worst-performing currency weighed by oil
    [KUALA LUMPUR] Malaysia's ringgit extended losses as this month's worst-performing Asian currency on concern a protracted drop in crude will weigh on the oil-exporting nation.

    The currency declined for a second day and reached a new 2009 low after Brent slid 2.3 per cent overnight on a report showing US oil stockpiles climbed to the highest level in weekly data going back to 1982. Malaysia kept borrowing costs at 3.25 per cent Wednesday even as central banks around the world eased monetary policy amid slowing global growth and falling consumer prices. The nation's 10-year government bond yields headed for the biggest monthly decline since 2008.

    "The ringgit is weakening on concern crude oil will fall further after the US record inventory report," said Nizam Idris, Singapore-based head of foreign-exchange and fixed-income strategy at Macquarie Bank Ltd. "There is also growing pressure on central banks to ease monetary policy and Malaysia is probably doing so via weakening the currency." The ringgit fell 0.4 per cent to 3.6340 a dollar as of 10:08 am in Kuala Lumpur, adding to yesterday's 0.6 per cent loss, according to data compiled by Bloomberg. The currency earlier touched 3.6375, the weakest level since April 2009.

    ING Groep NV cut its year-end forecast for the ringgit to 3.78 a dollar from 3.68, after Singapore's central bank unexpectedly eased policy yesterday via its currency band.
    Bank Negara Malaysia's decision to hold the benchmark rate was predicted by all 19 economists surveyed by Bloomberg. The policy stance is accommodative and appropriate given the developments in monetary and financial conditions, the central bank said in a statement Wednesday.

    Prime Minister Najib Razak last week reduced the country's 2015 growth forecast to 4.5 per cent to 5.5 per cent from as much as 6 per cent earlier due to the drop in oil.

    The yield on the nation's 10-year sovereign bonds was little changed at 3.86 percent after yesterday dropping six basis points, or 0.06 percentage point, data compiled by Bloomberg show. The yield has fallen 29 basis points this month, the most for a benchmark of that maturity since December 2008.
    Ringgit falls as Asia's worst-performing currency weighed by oil
    [KUALA LUMPUR] Malaysia's ringgit extended losses as this month's worst-performing Asian currency on concern a protracted drop in crude will weigh on the oil-exporting nation.

    The currency declined for a second da...See more
  • North Korea may be restarting reactor which produces nuclear bomb fuel
    North Korea may be attempting to restart its main nuclear bomb fuel reactor after a five-month shutdown, a US research institute said Thursday.

    If true, the finding, which is based on recent commercial satellite imagery, will be an added worry for the United States and the North’s neighbours at a time of increasing animosity over recent sanctions against the North and Pyongyang’s fury about a UN push to punish its alleged human rights abuses.

    Activity at the 5-megawatt Yongbyon reactor is closely watched because North Korea is thought to have a handful of crude nuclear bombs, part of its efforts to build an arsenal of nuclear tipped missiles that could one day hit America’s mainland.

    Yongbyon, which has produced plutonium used for past nuclear test explosions, restarted in 2013 after being shuttered under a 2007 disarmament agreement. It has been offline since August.

    Possible signs in satellite imagery from 24 December to 11 January that the reactor is in the early stages of being restarted include hot water drainage from a pipe at a turbine building that indicates steam from the reactor and growing snow-melt on the roofs of the reactor and turbine buildings.

    The US-Korea Institute at Johns Hopkins School of Advanced International Studies, however, said that since the recent observation period was only about two weeks, it’s too soon to reach a definitive conclusion about what’s happening and more monitoring is needed.

    The institute’s website, 38 North, published the findings.

    Yongbyon can likely produce about one bomb’s worth of plutonium per year. A uranium enrichment facility there could also give it a second method to produce fissile material for bombs. It is not clear if North Korea has yet mastered the technology needed to make warheads small enough to be mounted on missiles, but each nuclear test presumably moves its scientists closer toward that goal.
    North Korea has said it is willing to rejoin international nuclear disarmament talks last held in 2008, but Washington demands that it first take concrete steps to show it remains committed to past nuclear pledges.

    The United States also rejected a recent North Korean offer to impose a temporary moratorium on its nuclear tests if Washington scraps its annual military drills with Seoul; Pyongyang claims those drills are invasion preparation. The US called the linking of the military drills, which it says are defensive and routine, with a possible nuclear test “an implicit threat.”

    Always rocky ties between Pyongyang and Washington dipped lower because of a recent Hollywood movie depicting the assassination of North Korean leader Kim Jong Un.

    The US blames the North for crippling hacking attacks on the movie’s producer, Sony, and subsequently imposed new sanctions on the country, inviting an angry response from Pyongyang, which has denied responsibility for the cyberattacks.
    North Korea may be restarting reactor which produces nuclear bomb fuel
    North Korea may be attempting to restart its main nuclear bomb fuel reactor after a five-month shutdown, a US research institute said Thursday.

    If true, the finding, which is based on recent commercial satel...See more
  • Cuba demands return of Guantanamo Bay, compensation by U.S. before relations can resume
    SAN JOSE, Costa Rica — Cuban President Raul Castro demanded on Wednesday that the United States return the U.S. base at Guantanamo Bay, lift the half-century trade embargo on Cuba and compensate his country for damages before the two nations re-establish normal relations.

    Castro told a summit of the Community of Latin American and Caribbean States that Cuba and the U.S. are working toward full diplomatic relations but “if these problems aren’t resolved, this diplomatic rapprochement wouldn’t make any sense.”

    Castro and U.S. President Barack Obama announced on Dec. 17 that they would move toward renewing full diplomatic relations by reopening embassies in each other’s countries. The two governments held negotiations in Havana last week to discuss both the reopening of embassies and the broader agenda of re-establishing normal relations.

    Obama has loosened the trade embargo with a range of measures designed to increase economic ties with Cuba and increase the number of Cubans who don’t depend on the communist state for their livelihoods.


    The Obama administration says removing barriers to U.S. travel, remittances and exports to Cuba is a tactical change that supports the United States’ unaltered goal of reforming Cuba’s single-party political system and centrally planned economy.
    Cuba has said it welcomes the measures but has no intention of changing its system. Without establishing specific conditions, Castro’s government has increasingly linked the negotiations with the U.S. to a set of longstanding demands that include an end to U.S. support for Cuban dissidents and Cuba’s removal from the U.S. list of state sponsors of terrorism.

    On Wednesday, Castro emphasized an even broader list of Cuban demands, saying that while diplomatic ties may be re-established, normal relations with the U.S. depend on a series of concessions that appear highly unlikely in the near future.

    The U.S. established the military base in 1903, and the current Cuban government has been demanding the land’s return since the 1959 revolution that brought it to power. Cuba also wants the U.S. to pay hundreds of millions of dollars in damages for losses caused by the embargo.

    “The re-establishment of diplomatic relations is the start of a process of normalizing bilateral relations, but this will not be possible while the blockade still exists, while they don’t give back the territory illegally occupied by the Guantanamo naval base,” Castro said.

    He demanded that the U.S. end the transmission of anti-Castro radio and television broadcasts and deliver “just compensation to our people for the human and economic damage that they’re suffered.”
    The U.S. State Department did not immediately respond to a request for comment on Castro’s remarks.

    Castro’s call for an end to the U.S. embargo drew support at the summit from the presidents of Brazil, Ecuador, El Salvador, Nicaragua and Venezuela.

    Brazilian President Dilma Rousseff also praised the effort by the leaders of Cuba and the U.S. to improve relations. “The two heads of state deserve our recognition for the decision they made — beneficial for Cubans and Americans, but, most of all, for the entire continent,” she said.

    John Caulfield, who led the U.S. Interests Section in Havana until last year, said that the tone of Cuba’s recent remarks didn’t mean it would be harder than expected to reach a deal on short-term goals like reopening full embassies in Havana and Washington.

    In fact, he said, the comments by Castro and high-ranking diplomats may indicate the pressure Cuba’s government is feeling to strike a deal as Cubans’ hopes for better living conditions rise in the wake of Obama’s outreach.

    “There is this huge expectation of change and this expectation has been set off by the president’s announcement,” Caulfield said. The Cuban government feels “the constant need to tell their people nothing’s going to change … the more the Cubans feel obligated to defend the status quo and to say that’s nothing going to change, the more pressure it indicates to me is on them to make these changes, partly on the economic side but I would also say on the political side.”
    Cuba demands return of Guantanamo Bay, compensation by U.S. before relations can resume
    SAN JOSE, Costa Rica — Cuban President Raul Castro demanded on Wednesday that the United States return the U.S. base at Guantanamo Bay, lift the half-century trade embargo on Cuba and compensate his countr...See more
  • Islamic State releases new audio message by Japanese hostage
    The Islamic State group released a message late Wednesday purportedly by Japanese hostage Kenji Goto, extending the deadline for Jordan's release of an Iraqi would-be hotel bomber linked to al Qaeda.

    The audio was released as Jordan had offered a precedent-setting prisoner swap to the Islamic State group in a desperate attempt to save a Jordanian air force pilot the militants purportedly threatened to kill, along with Goto.

    The audio recording, in English, says the Jordanians must present Sajida al-Rishawi at the Turkish border by sunset Thursday, or Jordanian pilot Mu'as al-Kasaseabeh will be killed.

    The Associated Press could not independently verify the contents of the recording which was distributed on Twitter by IS-affiliated accounts.

    On Wednesday, the pilot's father met with Jordan's king who he said assured him that "everything will be fine."

    King Abdullah II faces growing domestic pressure to bring the pilot home. However, meeting the Islamic State's demand for the release of a would-be hotel bomber linked to al-Qaeda would run counter to the kingdom's hardline approach to the extremists.

    Efforts to release al-Kaseasbeh and Goto gained urgency with the release late Tuesday of a purported online ultimatum claiming the Islamic State group would kill both hostages within 24 hours if the al Qaeda-linked prisoner was not freed.

    The scope of a possible swap and of the Islamic State group's demands also remained unclear.

    Jordanian government spokesman Mohammed al-Momani said Jordan is ready to trade the prisoner, an Iraqi woman convicted of involvement in deadly Amman hotel bombings in 2005, for the pilot. Al-Momani made no mention of Goto.

    Any exchange would set a precedent for negotiating with the Islamic State militants, who in the past have not publicly demanded prisoner releases. Jordan's main ally, the United States, opposes negotiations with extremists.

    The release of al-Rishawi, the al Qaeda-linked prisoner, would also be a propaganda coup for the militants who have already overrun large parts of neighboring Syria and Iraq. Jordan is part of a US-led military alliance that has carried out airstrikes against Islamic State targets in Syria and Iraq in recent months.

    Participation in the alliance is unpopular in Jordan, and the capture of the pilot has only exacerbated such sentiments, analysts said.

    "Public opinion in Jordan is putting huge pressure on the government to negotiate with the Islamic State group," said Marwan Shehadeh, a scholar with ties to ultra-conservative Islamic groups in Jordan. "If the government doesn't make a serious effort to release him, the morale of the entire military will deteriorate and the public will lose trust in the political regime."

    The pilot's family, meanwhile, is increasingly vocal in its criticism of the government.

    Several dozen protesters gathered Wednesday outside King Abdullah's palace in Amman, urging the government to do more to win the release of the pilot. "Listen, Abdullah, the son of Jordan (the pilot) must be returned home," the protesters chanted.

    The pilot's father, Safi al-Kasaesbeh, was part of the group and was allowed into the palace, along with his wife, to meet Abdullah.

    "The king told me that Muath is like my son and God willing everything will be fine," al-Kasaesbeh said afterward.

    Earlier, he criticized the government's handling of the crisis.

    "I contacted the Turkish authorities after I found that the Jordanian government is not serious in the negotiations," he told The Associated Press. "The government needs to work seriously, the way one would do to free a son, like the Japanese government does."

    Jordan reportedly is holding indirect talks with the militants through religious and tribal leaders in Iraq to secure the release of the hostages.

    In his brief statement, al-Momani only said Jordan is willing to swap al-Rishawi for the pilot, but not if such an exchange is being arranged. Al-Rishawi was sentenced to death for her involvement in the al-Qaeda attack on hotels in Amman that killed 60 people.

    In Tokyo, Goto's mother, Junko Ishido, appealed publicly to Prime Minister Shinzo Abe. "Please save Kenji's life," Ishido said, begging Abe to work with the Jordanian government until the very end to try to save Goto.

    "Kenji has only a little time left," she said in a plea read to reporters. Ishido said both Abe and Japan's main government spokesman had declined to meet with her.

    Abe on Thursday said the government was analyzing the latest audio but declined to comment on the content of the latest video, while reiterating his condemnation of the IS hostage-taking.

    "The heinous terrorist act is totally unforgivable," he said in Parliament in response to a ruling party lawmaker's question.

    Later, a few dozen people gathered outside the prime minister's official residence, holding banners expressing hopes for Goto's release. "I have been trying to keep my hopes up and believe that Mr Goto will return. I have this faith within me," said Seigo Maeda, 46, a friend of Goto.

    The militants reportedly have killed a Japanese hostage, Haruna Yukawa, and the crisis has stunned Japan.

    Muath al-Kaseasbeh, 26, was seized after his Jordanian F-16 crashed in December near the Islamic State group's de facto capital of Raqqa in Syria. He is the first foreign military pilot the militants have captured since the coalition began its airstrikes in August.

    This is the first time the group has publicly demanded the release of prisoners in exchange for hostages. Previous captives may have been freed in exchange for ransom, although the governments involved have refused to confirm any payments were made.

    Goto, a freelance journalist, was captured in October in Syria, apparently while trying to rescue Yukawa, 42, who was taken hostage last summer.

    The Islamic State group broke with al Qaeda's central leadership in 2013 and has clashed with its Syrian branch, but it reveres the global terror network's former Iraqi affiliate, which battled US forces and claimed the 2005 Amman attack.
    Islamic State releases new audio message by Japanese hostage
    The Islamic State group released a message late Wednesday purportedly by Japanese hostage Kenji Goto, extending the deadline for Jordan's release of an Iraqi would-be hotel bomber linked to al Qaeda.

    The audio was rel...See more
  • Jane created a new blog post
    Beauty Products May Trigger Early Menopause
    Biology determines when women hit menopause, but exposure to some common household products and pollutants may drive that timing even earlierMenopause...
  • Saudi Arabia's smooth succession and uncertain future
    You need only look at the looming prospect of (yet another) Bush-Clinton US presidential contest in 2016 to see that there must be something in the idea.

    And so it is in Saudi Arabia.

    But, in true Saudi Arabian style, the family business involves a much bigger family and the money involved is that much greater.

    The bad news, however, is that the family business is set in a dodgy and ever more violent neighbourhood.

    On top of that, some other long-running family businesses in the area (think Gaddafi and Mubarak) have gone down the pan rather suddenly and somewhat unexpectedly.
    The critics and enemies of Saudi Arabia's ruling family, and they have plenty both in and out of the country, had been predicting for a while that when King Abdullah bin Abdulaziz died, which he did on Friday, there would be a real possibility of chaos.

    Thy had expected the fissures and disputes between rival factions within the ruling family to spill out into the wider world - but that has not happened.

    And, for now at least, the ruling family have shown that when it comes to it, they know exactly what needs to be done to hang on to power.

    Saudi Arabia's old ruler was buried and a new king installed on the throne in quick time. And the country declared it was business as usual. Well, not quite.
    Negotiations between members of the Saudi Arabia's first family about who gets what job must make the fraught negotiations in 2010 to form a coalition government in the UK seem like a walk in the park.

    The key thing to note is King Salman's appointment of his half-brother, Prince Muqrin, as Crown Prince and next in line to the throne.

    Prince Muqrin is a former head of Saudi Arabia's intelligence agency and the youngest surviving son of the country's founder.

    The confirmation of Mohambed bin Nayef as Deputy Crown Prince is another important signal and an attempt to seal the deal for the next generation of grandsons all vying for position in the future.

    But it's too early to tell what will happen, and the intrigue about the long-term succession will continue.

    As the past few years across the Middle East have shown, there are no guarantees.

    Family politics aside, the challenges for the Saudi Arabian rulers continue to multiply, at home and abroad.

    At home, there are no signs that anyone has found a long-term answer to the country's economic and social problems.

    Unemployment rates are high and the population is growing, with the young in particular restless and hungry for change.

    Far too many Saudi Arabians rely on government jobs to make their way, and the country's human rights record continues to attract opprobrium worldwide.

    Women's rights, or more accurately non-rights, also remain a festering sore, with the ban on women drivers just one item in a long list of restrictions.

    Meanwhile, beyond the centre of power in Riyadh, things continue to deteriorate from the Saudi Arabian point of view.

    There are problems with the Shia minority in the east of the country.
    Saudi Arabia's smooth succession and uncertain future
    You need only look at the looming prospect of (yet another) Bush-Clinton US presidential contest in 2016 to see that there must be something in the idea.

    And so it is in Saudi Arabia.

    But, in true Saudi Arabia...See more
  • Top NSW cop returns as bugging scandal clouds leadership
    ONE of the most senior police commanders in NSW, Nick Kaldas, returns to work today as a parliamentary inquiry begins into a bugging scandal that threatens to split the force and could influence the choice of a successor to Commissioner Andrew Scipione.

    Former premier Barry O’Farrell has backed Mr Kaldas, one of three deputies to Mr Scipione, for the top job, saying he was “one of the most experienced police officer anywhere in this country and he could certainly go on to be a great commissioner”.

    Mr Kaldas, who has been on sick leave since November with a heart complaint, is the most high-profile of more than 100 police officer­s and civilians placed under covert surveillance by their colleagues more than a decade ago.

    Many of those who were targeted have made formal submissions to the parliamentary inquiry alleging this was done illegally and without justification, as part of an anti-corruption investigation led by another current Deputy Commissioner and rival to Mr Kaldas for the top job, Cath Burn. Mr Kaldas and Ms Burn will give evidence to the inquiry tomorrow.

    UPDATE: Police bugging operation destroyed my reputation, says journalist

    Evidence before the inquiry suggests the bugging operation was run out of the police force’s Special Crimes and Internal Affairs­ unit from about 2000. Mr Scipione, who will also give evidence to the parliamentary inquiry, was the Internal Affairs commander from 2001.

    In her submission to the inquiry, Ms Burn said: “I deny that ... I directed the use of illegal warrants to secretly record conversations of my rivals in the police force and in particular Deputy Commissioner Nick Kaldas.”

    Mr Kaldas’s own formal submission to the inquiry will be made public this morning.

    Evidence before the inquiry suggests his office, telephone and family home were all placed under surveillance by police investigat­ors, although he has never been found guilty of any offence.

    With Mr Scipione expected to step down from the commissioner’s role this year, Mr Kaldas and Ms Burn are widely seen as the main contenders for the job, an appointment to be made by Mr O’Farrell’s successor, Mike Baird.

    Mr O’Farrell said Mr Kaldas’s policing successes both in Australia and internationally made him an obvious choice. “We live in NSW, Australia’s most multicultural state, (and) Nick Kaldas’s background plus his international experience equips him better than most to take on the job,” Mr O’Farrell said.

    A fluent Arabic speaker, Mr Kaldas won high regard in 2009 for his role leading a UN investigation into the death of former Leban­ese prime minister Rafiq Hariri and he continues to enjoy widespread support among Sydney’s Lebanese community.

    Sydney Muslim community leader Jamal Rifi, whose brother was police chief in Lebanon at the time, praised Mr Kaldas’s work on the Hariri investigation.

    “I feel we are lucky in NSW to have someone with his calibre and experience,” Dr Rifi said.

    State Liberal MP Charles Casus­celli told parliament recently that Mr Kaldas was equally at ease with Muslims, Christians, Jews, Buddhists and atheists. “There has never been a more senior police officer who just ‘gets it’,” he said.

    As deputy commissioner in charge of field operations, Mr Kaldas has direct responsibility for the majority of the force’s roughly 20,000 employees.

    He led a co-ordinated response to Sydney’s wave of shootings in recent years, the number of which began to rise again during the time he was on leave.

    The select committee inquiry, convened despite opposition from the Baird government, will also release a copy today of two NSW Supreme Court warrants authorising the covert surveillance of 114 people, including senior serving police officers and at least one journalist.

    A copy of the police affidavit tendered to the court in support of the warrant will also be released.

    The Australian understands about 50 of the names on the warrant are missing from the affidavit, raising questions over the integrity of the processes followed by both the NSW police and the Supreme Court. The inquiry was called by the Shooters and Fishers Party, along with the Greens, with the backing of Labor, over concerns a long-running investig­ation by the NSW Ombuds­man into the ­surveillance saga was focusi­ng unfairly on identifying the whistleblowers involved.

    A submission by former detective superintendent Brian Harding, who is also due to give evidence today, says: “The NSW Ombudsman … appears to be not interested in pursuing the illegal acts committed some 12 years ago, but is focused on hunting down and prosecuting all those who have aired the leaked documents and complained about how wrong the (surveillance was).”

    A spokesman for Mr Baird said: “The NSW government continues to rely on direct advice from the Ombudsman, who is independently investigating this matter and has committed to presenting a public report in the first half of this year.

    “It is disappointing that at a time when we should be praising the joint efforts of the NSW police, the opposition and minor party MPs are trying to score cheap political points,” he said.
    Top NSW cop returns as bugging scandal clouds leadership
    ONE of the most senior police commanders in NSW, Nick Kaldas, returns to work today as a parliamentary inquiry begins into a bugging scandal that threatens to split the force and could influence the choice of a successor to Commissioner...See more
  • Malaysian ringgit hit by Singapore easing monetary policy
    PETALING JAYA - The ringgit has become an unwitting casualty of Singapore's surprise easing of its tightly controlled monetary policy, as the country joined a growing list of central banks around the world taking extraordinary steps in shoring up faltering economic growth as inflation slows.

    The Monetary Authority of Singapore (MAS) yesterday, in an unscheduled statement, said that it was slowing the appreciation of the Singapore dollar because its inflation outlook had "shifted significantly" since its last review in October 2014.

    This was MAS' first emergency policy change since September 2001.

    The Singapore dollar tumbled as much as 1.35 per cent against the US dollar yesterday, as the ringgit fell in tandem. The local unit, however, narrowed its earlier losses to end down 0.5 per cent at 3.6185 against the greenback, as Bank Negara held its interest rate steady at 3.25 per cent after a scheduled policy meeting.

    CIMB Investment Bank head of interest rates and foreign exchange strategy Suresh Kumar Ramanathan said the fall in the ringgit was mainly a knee-jerk reaction to MAS' move to ease monetary policy ahead of its scheduled meeting in April.
    Also, it was a reaction to maintain the cross rates between the two countries, he added.

    "If the ringgit stays at the 3.60 to 3.65 level, and there is a gradual depreciation in the Singapore dollar, in the near term, there is a high probability of the ringgit appreciating against the Singapore dollar closer to 2.60 from its current level," he said.

    The ringgit had weakend 4.7 per cent against the Singapore dollar at 2.679 over the past six months.

    Analysts said MAS altered only one of its monitory policy tools by reducing the slope of its currency ban to slow down the appreciation of the Singapore dollar against its regional counterparts.

    Westpac Banking Corp Singapore currency strategist Jonathan Cavenagh said there was a high correlation between the Singapore dollar and the US dollar and the ringgit and the US dollar, because of the huge trade flows between the two neighbouring countries.

    "There is a certain degree between trade flows between the two countries and both central banks tend to monitor the cross rates closely," he said.

    The unexpected move by MAS, which uses the exchange rate as its main policy tool, would provide competitiveness to Singapore's manufacturing exports.

    Bank Negara, in the statement yesterday, said there has been increasing divergence in the growth momentum among the major economies. "For most of Asia, growth is supported by the continued expansion in both domestic and external demand.

    "Looking ahead, despite the varying impacts of the significantly lower oil prices on economies, the overall global economy is expected to benefit from this development.

    "Nevertheless, the downside risk to the global economic outlook has increased, following the weakening growth momentum in a number of major economies due to external and domestic specific factors," it said.

    Affin Hwang Capital economist Alan Tan said the overnight policy rate would likely remain at 3.25 per cent throughout 2015.

    "With Bank Negara's focus on economic growth, because of the uncertainty in the global economy, we do not expect inflationary pressure to be significant even after the implementation of the GST (goods and services tax).

    "The impact of that will be offset partially by lower global oil on domestic fuel prices," he said.

    With inflationary pressure remaining manageable and the impact of the GST offset by oil prices, the policy rate could be accommodative to ensure economic growth is sustainable, he added.

    Bank Negara expects inflation for 2015 to be lower than what had been anticipated earlier due to the lower energy and commodity prices.

    It added that while the Malaysian financial markets had been affected by these global developments, there had been no disruption to financial intermediation.

    "There remains ample liquidity in the domestic financial system with continued orderly functioning of the financial markets," it said.

    It added that domestic demand would remain as Malaysia's key driver of growth and expected the economy to remain on a steady growth path.
    Malaysian ringgit hit by Singapore easing monetary policy
    PETALING JAYA - The ringgit has become an unwitting casualty of Singapore's surprise easing of its tightly controlled monetary policy, as the country joined a growing list of central banks around the world taking extraordinary steps in...See more
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