BANK Negara Malaysia (BNM) has maintained the overnight policy rate (OPR) at 3% following the conclusion of its two-day Monetary Policy Committee (MPC) meeting today.
In an official statement, the central bank confirmed that the current OPR level supports the economy and aligns with the present assessment of inflation and growth prospects.
“The MPC remains vigilant to ongoing developments to inform the assessment on the domestic inflation and growth trajectories. The MPC will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability,” the statement read.
BNM last increased the OPR from 2.75% to 3% in May 2023 and has kept the rate steady through seven consecutive MPC meetings since. The central bank had previously cut the OPR to a historic low of 1.75% in July 2020 in response to the economic fallout from the COVID-19 pandemic.
BNM then reversed course, raising the OPR by a cumulative 125 basis points between May 2022 and May 2023.
Regarding the Malaysian economy, BNM highlighted sustained economic activity strength in the second quarter of 2024, driven by robust domestic expenditure and improved export performance.
“Going forward, exports are expected to be further lifted by the global tech upcycle given Malaysia’s position in the semiconductor supply chain, as well as continued strength in non-electrical and electronics goods. Tourist arrivals and spending are also poised to rise further.”
Moreover, BNM also noted that continued employment and wage growth, along with supportive policy measures, will bolster household spending.
“Investment activity would be supported by the ongoing progress of multi-year projects in both the private and public sectors, the implementation of catalytic initiatives under the national master plans, as well as the higher realisation of approved investments,” the bank stated.
Furthermore, the MPC’s decision to maintain the interest rate was widely expected, with a recent Bloomberg News survey showing that all 22 economists surveyed predicted BNM would leave the OPR unchanged. – July 11, 2024
Main photo credit: Borneo Post Online
