KUALA LUMPUR – Bank Negara Malaysia (BNM) at its fifth monetary policy committee (MPC) meeting today maintained the overnight policy rate (OPR) at 1.75%.
“MPC considers the stance of monetary policy to be appropriate and accommodative,” it said in a statement.
“In addition, fiscal and financial measures will continue to cushion the economic impact on businesses and households, and provide support to economic activity.”
The OPR has remained at 1.75% since July 7 last year.
BNM said given the uncertainties surrounding the Covid-19 pandemic, the stance of monetary policy will continue to be determined by new data and information, and its implications for the overall outlook for inflation and domestic growth.
The central bank said it remains committed to utilising its policy levers as appropriate to foster enabling conditions for a sustainable economic recovery.
On the Malaysian economy, it said the reimposition of nationwide containment measures to curb a resurgence of Covid-19 dampened the growth momentum.
“However, the recent gradual relaxations for more economic sectors to operate, along with the higher adaptability of firms to the new operating environment and continued policy support, will partly mitigate the impact and allow the economy to resume on its recovery path.
“Moving forward, the further easing of containment measures, rapid progress of the domestic vaccination programme, and continued expansion in global demand will support the growth momentum going into 2022.”
It said risks to the growth outlook, however, remain tilted to the downside due to external and domestic factors.
These include delays in the easing or reimposition of broad-based containment measures due to the impact of new Covid-19 variants of concern (VOCs) and a weaker-than-expected global growth recovery.
Year-to-date, headline inflation averaged 2.3%, and is projected to hover between 2.0% and 3.0% for 2021.
Underlying inflation, as measured by core inflation, is expected to remain subdued, averaging between 0.5% and 1.5% for the year amid continued spare capacity in the economy.
“The outlook, however, continues to be subject to global commodity price developments and policy measures to alleviate the cost burden of the public,” said BNM.
“Underlying inflation, however, is expected to remain relatively subdued in 2022.”
The global economy continues to recover, supported by improvements in manufacturing and services.
The bank said the strength of the recovery remains varied across countries, mainly corresponding with their vaccination coverage, relaxation of containment measures, and degree of policy support.
“Overall, the balance of risks to the global growth outlook is tilted to the downside.
“This is attributed mainly to uncertainty over the path of the pandemic amid the emergence of VOCs, and the potential risk of heightened financial market volatility amid adjustments in monetary policy in major economies.” – Bernama, September 9, 2021
