THE Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) has decided to maintain the overnight policy rate (OPR) at 1.75%.
The MPC considers the stance of monetary policy to be appropriate and accommodative. In addition, fiscal and financial measures will continue to cushion the economic impact on businesses and households and provide support to economic activity.
“Given the uncertainties surrounding the pandemic, the stance of monetary policy will continue to be determined by new data and information and their implications on the overall outlook for inflation and domestic growth,” the central bank pointed out in its monetary policy statement.
“The bank (BNM) remains committed to utilise its policy levers as appropriate to foster enabling conditions for a sustainable economic recovery.”
Although financial conditions remain supportive of growth, BNM said the balance of risks to the growth outlook remains tilted to the downside due mainly to uncertainty over the path of the pandemic as well as potential risks of heightened financial market volatility.
Although better-than-expected economic activity in 1Q 2021 continued into April as reflected by exports, retail spending and labour market conditions, the re-imposition of nationwide containment measures to curb the resurgence in COVID-19 cases is expected to dampen growth momentum.
“The degree of impact to the economy is highly dependent on the stringency and duration of containment measures,” opined BNM.
“Nevertheless, continued allowances for essential economic sectors to operate, albeit at a reduced capacity, and higher adaptability to remote work, automation and digitalisation will partly mitigate the impact of restrictions.”
The growth outlook, however, remains subject to significant downside risks due mainly to factors that could lead to a delay in the easing of containment measures or imposition of tighter containment measures, and a weaker-than-expected global growth recovery, according to BNM.
“The materialisation of these risks could undermine the growth recovery,” the central bank pointed out.
UMNO awal pagi ini memutuskan untuk menarik balik dan menamatkan sokongan serta-merta terhadap Tan Sri Muhyiddin Yassin.
Ahmad Zahid yang juga Ahli Parlimen Bagan Datuk berkata keputusan berkenaan dicapai susulan kegagalan kerajaan Perikatan Nasional (PN) memenuhi tujuh pra syarat yang ditetapkan UMNO sewaktu Muhyiddin menjadi Perdana Menteri pada 1 Mac 2020.
— fotoBERNAMA (2021) HAK CIPTA TERPELIHARA
In another development, Affin Hwang Capital Asset Management (AHCAM) said fundamentally-driven stocks have priced-in negatives from rising COVID-19 cases and political overhang but “not a change in government”.
“We don’t think that is a reality at this point in time, although this is a low conviction view given how fluid politics can be,” opined the asset management company. “We think there is more upside from economic re-opening than further political change.”
AHCAM does not expect a change in government anytime soon as the opposition is not overwhelming – even within UMNO.
“No one party controls enough to drive a change in government currently,” it pointed out. “We think the current administration will try to hang on as long as possible to ride the economic re-opening wave. This could happen by year end as vaccinations are ramped-up.”
As to how stable the new government would be, AHCAM said: “The current government is composed of a coalition of 12 parties while there is currently six opposition parties. Almost all the major parties have worked for and against one another at one point in time.
“Even with a clear majority of electoral votes, coalition politics will not be stable. We find it hard to view a stable governing coalition based on the current state of events.” – July 8, 2021
