[UPDATED] BNM maintains OPR at 2.75%

KUALA LUMPUR – Bank Negara Malaysia has maintained its overnight policy rate (OPR) at 2.75%. 

In a statement today, it said its Monetary Policy Committee (MPC) decided to maintain the rate as it is accommodative and supportive of economic growth, and will help keep inflation low.

The last OPR hike was in November, by 25 basis points to 2.75%. 

In January, BNM said it was maintaining the rate to enable assessment of the cumulative effects of previous consecutive OPR hikes on the economy.

Previous hikes of 25 basis points each had been made in May, July and September last year.

BNM today said central banks in other countries are expected to continue raising their interest rates to manage inflation pressures and thus pose challenges to the growth outlook.

While Malaysia’s economy had expanded strongly by 8.7% in 2022 driven by the recovery in the private and public sectors, growth is expected to moderate this year amid a slower global economy and be driven by domestic demand. 

Headline and core inflation are also expected to moderate over the year but will remain “elevated” due to demand and cost factors, BNM said. 

“The extent of upward pressures to inflation will remain partly contained by existing price controls and fuel subsidies, and the remaining spare capacity in the economy. 

“The balance of risk to the inflation outlook is tilted to the upside and continues to be highly subject to any changes to domestic policy on subsidies and price controls, as well as global commodity price developments.” 

According to the Department of Statistics, Malaysia’s inflation for 2022 overall was 3.3% compared to 2.5% for 2021. 

For 2023, the World Bank has forecasted headline consumer price inflation to moderate between 2.5% and 3.0%. 

Month by month, inflation has been easing since October last year, and was 3.7% in January compared to 3.8% in December last year. – The Vibes, March 9, 2023