“Bank Negara should maintain freeze on interest rate hikes,” says Guan Eng

BANK Negara Malaysia (BNM) has been urged to continue its policy of holding off on hiking interest rates through the Overnight Policy Rate (OPR).

“BBM should align itself with the new policies of Prime Minister Anwar Ibrahim’s government by focusing on his three key priorities. These are to rein in any increases in the cost of living, generating economic growth in the face of a global slowdown and combating corruption,” Malaysiakini reported former finance minister Lim Guan Eng as saying.

“The central bank had highlighted six key policy priorities for reforms, namely, digitalisation, fiscal resilience, climate resilient economy, growth potential, future-ready workforce and social protection.”

While the six main structural reforms advocated by BNM governor Tan Sri Nor Shamsiah Mohd Yunus to improve Malaysia’s competitiveness and development potential are a long-term aim, the Bagan MP is of the opinion that Prime Minister Datuk Seri Anwar Ibrahim three key goals should be prioritised.

He pointed out that this is to ensure racists and extremists don’t undermine the stability of the unity government.

Political stability

Lim Guan Eng

In order to assist the government to establish political stability, Lim called on BNM to take an active role in doing so.

According to the DAP chairman, this will help investors feel reassured of a progressive, competent, transparent and inclusive administration, instead of an extremist, racist, incompetent and dishonest government devoid of any rational economic planning.

He added that the first step that Shamsiah should do is to arrest any increase in the cost of living by continuing its pause of OPR hikes to cushion individual and business borrowers from added financial costs.

“With inflation moderating to 3.7% in February, there is no need for any interest rate hikes,” he noted.

Lim went on to say that BNM’s interest rate freeze had caused the ringgit’s value to depreciate against the US dollar which had risen from a low of RM4.75 during the previous administration to RM4.41 today.

“In other words, hikes or cuts in the OPR have no discernible effect on the value of the ringgit against the US dollar which is determined by external factors beyond the country’s control. BNM should show it has a heart for small businesses and individuals by continuing its pause of any hikes in the OPR.” — March 31, 2023

Subscribe and get top news delivered to your Inbox everyday for FREE