VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

Malaysia's central bank will raise rates by 25 basis points on Wednesday, its first consecutive rise in more than a decade, to rein in inflation stemming in part from a weaker ringgit as the U.S. Federal Reserve hikes aggressively, a Reuters poll found.

Bank Negara Malaysia (BNM), although dealing with low inflation compared with many other economies, unexpectedly raised its key overnight policy rate by 25 basis points to 2.00% at its May meeting.

All 22 economists in the June 27-July 1 poll forecast rates (MYINTR=ECI) to rise by another 25 basis points to 2.25% at the July 6 meeting. The central bank last raised rates twice in a row in mid-2010.

Still, BNM, which has said it intends to take a "measured and gradual" pace, was expected to go slow compared with other global peers.

A slight majority of survey respondents, 12 of 22, predicted another 25 basis point rise in September to 2.50%, while the remaining 10 expected no change after a July hike.

Either way, more rate hikes are certainly coming.

"BNM will be mindful of potential upside pressure to inflation stemming from recent increases in minimum wages, upward adjustments in price ceilings for certain food products, and a pickup in demand-pull inflation on the back of economic reopening," noted Derrick Kam, Asia economist at Morgan Stanley.

Inflation rose to 2.8% in May from 2.3% in April. The Malaysian ringgit lost ground last quarter and has weakened nearly 6% so far this year, raising the prospect of imported inflation pressure.

"The Malaysian ringgit has been falling against the greenback due to aggressive rate hikes by the U.S. Federal Reserve, and raising the overnight policy rate will help to shore up the currency by maintaining the interest rate differential," said Denise Cheok, an economist at Moody's Analytics.

For the November meeting, 12 of 22 analysts in the poll predicted rates at 2.50%, eight said 2.75% while two said 2.25%.

Median forecasts from the poll also predicted 25 basis points hikes in each of the first two quarters of 2023. For Q1 2023, nine of 20 economists expected rates to rise to 2.75%, six forecast 3.00% while five said 2.50%.

The overnight rate was expected to reach its pre-pandemic level of 3.00% in the second quarter next year. Around half of respondents, nine of 19, predicted it to have risen to 3.00%, six said 2.75%, three said 2.50% and one said 3.25%.

BNM at its May meeting kept its 2022 economic growth forecast between 5.3%-6.3% and projected headline inflation to remain between 2.2%-3.2% this year. (Reuters)

South Korea's president warned a NATO summit of the threat to universal values at a time of new conflict and competition, a reference to Russia's aggression in Ukraine and China's engagement with Russia, a South Korean official said.

President Yoon Suk-yeol became the first South Korean leader to attend a NATO summit, joining national NATO leaders as an observer at a meeting in Spain as Russian forces intensified attacks in Ukraine.

"As a new structure of competitions and conflicts is taking shape, there is also a movement that denies the universal values that we have been protecting," Yoon said in a speech on Wednesday, according to a South Korean official.

While he did not identify Russia or China, Yoon said the international community was facing complex security threats that a single country could not solve, the official cited him as saying in his speech that was not made public.

"He was referring to the Ukraine war, and as most other participating countries did, he raised concern about Russia's responsibility for the war and China's responsibility in the international community," the official, who declined to be identified, said on Thursday.

South Korea is a staunch U.S. ally and hosts some 28,000 U.S. troops. It has also developed a crucial economic relationship with China, South Korea's largest trading partner.

Yoon, like his predecessors, will have to balance those two relationships while at the same time facing a belligerent North Korea developing its arsenal of nuclear weapons and the missiles to deliver them.

Yoon hopes to build relations with NATO members in the face of an unpredictable international situation and promote international cooperation on North Korea's nuclear ambitions, South Korean officials said before the summit.

South Korea's approach to NATO comes as the alliance is looking east towards a region it refers to as the Indo-Pacific, a new focus that Yoon welcomed, the official said.

NATO in its new strategic concept unveiled on Wednesday, for the first time described China as a challenge to NATO's "interests, security and values", as an economic and military power that remains "opaque about its strategy, intentions and military build-up".

China firmly opposes NATO's new strategic concept and called on NATO to "immediately stop groundless accusations and provocative remarks", Chinese foreign ministry spokesman Zhao Lijian told a regular briefing in Beijing on Thursday.

"NATO's strategic concept document ignores the facts...discredits China's foreign policy, speaks ill of China's normal military development and national defense policy and encourages confrontation," Zhao said.

Yoon, U.S. President Joe Biden and Japanese Prime Minister Fumio Kishida, also attending the NATO summit as an observer, met and agreed that the progress of North Korea's nuclear and missile programmes posed serious threats to not only the Korean peninsula but also East Asia and the world. read more

Chinese state media had warned against South Korea and Japan attending the NATO summit and criticised the alliance's broadening partnerships in Asia. North Korea said this week that NATO involvement in the Asia-Pacific region would import the conflict raging in Europe.

Australia and New Zealand also attended the summit, making four observers from the region. The South Korean official said the four were "exploring their own Indo-Pacific strategies".

"At the heart of that, there are concerns and various dilemmas about China," the official said.

Asked on Thursday about South Korea, Japan, Australia and New Zealand's attendance at the NATO summit, Chinese foreign ministry spokesman Zhao said that third parties should not be targeted, or their interests undermined as different countries develop relations with each other.

"China will pay close attention to the relevant trends of NATO and will not sit idly by and do nothing if matters are harming China's interests," he said. (Reuters)

The reclusive supreme leader of the Afghan Taliban, Haibatullah Akhundzada, hailed the Islamists 2021 takeover of Afghanistan during a meeting on Friday called to forge national unity and attended by religious leaders from around the country.

Taliban spokesmen confirmed that Akhundzada, who is based in the southern city of Kandahar, had come to the capital Kabul for the all-male gathering of some 3,000 participants.

After receiving pledges of allegiance from participants raising their hands, Akhundzada praised the Taliban's victory last August, which marked the end of a 20-year struggle to overthrow a western-backed government and drive U.S.-led forces out of the country.

"The success of the Afghan jihad is not only a source of pride for Afghans but also for Muslims all over the world," he said according to state-run Bakhtar News Agency, using the Arabic word signifying a spiritual struggle.

When the Islamist movement unveiled its interim government in September, the mysterious Akhundzada retained the role he has held since 2016 of supreme leader, the group's ultimate authority, but he is rarely seen publicly.

His address to the gathering of religious leaders comes a week after a deadly earthquake hit eastern Afghanistan, and exposed the lack of support the Taliban can count on from the international community.

The Afghan economy has plunged into crisis, as Western governments have withdrawn funding and strictly enforced sanctions, saying that the Taliban government needs to change course on human and women's rights.

In Thursday's speech, Akhundzada asked traders to return and invest in the country, saying overseas aid could not build the economy and would make Afghans more dependent on foreign money.

"Thank God, we are now an independent country. (Foreigners) should not give us their orders, it is our system and we have our own decisions," he said according to Bakhtar.

"We have a relationship of devotion to one God, we cannot accept the orders of others who God does not like," he said.

He said the group wanted peace and security and that neighbouring nations had nothing to fear.

The Kabul gathering began on Thursday under tight security.

At one point, sustained gunfire erupted near the venue, which Taliban spokesmen said was the result of security men firing at a "suspicious location", and the situation was under control.

At least one participant had called for girls' high schools to be opened but it was unclear how widespread support was for that proposal.

Deputy Taliban chief and acting interior minister Sirajuddin Haqqani addressed the meeting on Friday, saying the world was demanding inclusive government and education, and the issues needed time.

"This gathering is about trust, interaction, we are here to make our future according to Islam and to national interests," he said.

The Taliban went back on an announcement that all schools would open in March, leaving many girls who had turned up at their high schools in tears and drawing criticism from Western governments.

Taliban spokesman Zabihullah Mujahid said that they would respect the decisions of those at the meeting but the final say on girls' education was up to the supreme leader.

A hardline cleric whose son was a suicide bomber, Akhundzada has spent most of his leadership in the shadows, letting others take the lead in negotiations that ultimately saw the United States and their allies leave Afghanistan last August after 20 years of fighting a grinding counter-insurgency war. (Reuters)

Visiting the Malaysian city where she was born, Australian Foreign Minister Penny Wong said her story showed that Australia was part of Asia, as new data showed more than half of Australians were born overseas or had an immigrant parent.

Wong visited Kota Kinabalu, the capital of Sabah state, where she lived for eight years as a child before migrating to Australia, as part of an official visit to Malaysia.

"One in two Australians are either born overseas or have parents who were born overseas so this is a very Australian experience," she told media on her first visit to Malaysia since a Labor government won office last month.

"It matters that Australia speaks to South East Asia in a way that recognises that we are part of this region and our futures are shared," she said.

Results of a census conducted every five years and released on Tuesday showed for the first time more than half of the Australian population (51.5%) were born overseas or had a migrant parent.

"We are a multicultural and diverse nation ... It is one of the strengths of who Australia is and we should tell that story in the region more," she said.

Wong recalled a day earlier in a speech that her grandmother, of Hakka Chinese descent, had raised her children alone in Sabah after most of the family died in World War Two.

Wong's father won an Australian scholarship to study architecture at the University of Adelaide, which "meant he could climb out of the poverty he experienced as a child".

He married an Australian woman, and the couple returned to raise a family in Kota Kinabalu.

Wong's comments and official visit to Malaysia come two decades after a former Malaysian prime minister, Mahathir Mohamad, famously said Australia could not join an East Asian diplomatic group because "they are Europeans, they cannot be Asians".

Britain, India, China, New Zealand and the Philippines were the biggest source nations for the almost one-third of Australian residents who were born overseas, the census showed, with Asian countries combined a bigger source than Britain and New Zealand.

Mahathir, who did not immediately respond to a request for comment, had predicted in a 2019 newspaper interview that migration meant Australia would in future "be more Asian than European". (Reuters)