KUALA LUMPUR (July 6): Bank Negara Malaysia (BNM) has decided to maintain its overnight policy rate (OPR) at 3%.
This came in line with the expectations of most economists, who opined that nine months of easing inflation, together with the central bank’s recent ringgit intervention, provided some reprieve for the central bank’s new governor Datuk Shaik Abdul Rasheed Abdul Ghaffour.
BNM’s latest OPR decision follows the 25 basis point (bps) hike in May as it moved to further normalise monetary policy in line with resilient domestic growth prospects.
In a statement on Thursday (July 6), BNM said the 3% OPR remains slightly accommodative and supportive of the Malaysian economy as the central bank's Monetary Policy Committee (MPC) continues to see limited risks of future financial imbalances.
“The MPC remains vigilant to ongoing developments and will continue to monitor incoming data to inform the assessment on the outlook of domestic inflation and growth,” the central bank said in a statement on Thursday.
“The MPC will ensure that the monetary policy remains conducive to sustainable economic growth amid price stability,” it added.
Speaking on the state of the Malaysian economy, BNM said that following its strong outturn in the first quarter of the year, it has since expanded at a more moderate pace as exports were weighed down by slower external demand in line with expectations.
Going forward, the central bank said economic growth will continue to be driven by resilient domestic demand.
“While the growth outlook is subject to some downside risks stemming from weaker-than-expected global growth, upside risks mainly emanate from domestic factors such as stronger-than-expected tourism activity and faster implementation of projects,” it added.