5.5.11

5.5.11 was a date of yesterday. Nice numbers but not for Malaysians it is not a good sign since;

1. Ron97 price increased by RM0.20 by on this date. The new price for Ron97 will RM2.90, the highest price so far. Read this

2. Central Bank increased the overnight policy rate (OPR)to 3% from 2.75%, up 25 basis points.

3. Central Bank increased statutory reserve requirement (SRR) from three per cent from two per cent, effective May 16.

Ron97 already increase 3 times this year. It is economic supply shock that increase the price of goods and lead to inflation. Thus, interest rate hike is inevitable to combat this problem. However with the increase of OPR those who use loan/bank lending rate will get hit.In other words the bank financing will see increase in interest charges once the banks hikes their rate. Everybody knows that it is not a good time to make a bank loan.

4. That is a common explanation when the government take this action. So today I wait anxiously if SV will asked me the consequences of these actions because he used to do that since I'm dealing with OPR, BLR and monetary transmission mechanism. However, SV did it in a more "mean' way. He saw me walking with my friends for lunch, he honked us and stopped the car said to my friend to tell me kirim salam and tanya dia tesis dah siap? my excuse - macam mana tesis nak siap sebab harga minyak tak stabil and polisi BNM sentiasa berubah.

Again, 5.5.11 is a nice number for car's plat number (note:one of my SVs used 5511 as his car plat number) but not for the economist because you are going to find in laporan bank negara & etc about this date and for the econometrician there is something can be tested on this date.