KUALA LUMPUR – Bank Negara Malaysia’s (BNM) decision to maintain the overnight policy rate (OPR) will help small and medium enterprises (SMEs) evaluate their financial health and build cash reserves to prepare for a potential slowdown this year, expected to mainly arise from external fronts.
BNM maintained its OPR at 2.75% following its first 2023 Monetary Policy Committee meeting yesterday.
In a statement today, SME Bank group president/chief executive officer Datuk Aria Putera Ismail said the bank is committed to serve SMEs’ financial needs.
“The potential removal of the blanket fuel subsidy is seen as a key upside risk for inflation pressure depending on its implementation timeline and roll-out mechanism.
“Hence, it is crucial for SMEs to be proactive in forecasting, budgeting, and being agile to changing market conditions to ensure a healthy cash flow during a higher rate environment,” he said.
Meanwhile, SME Bank chief economist Lynette Lee opined that BNM is expected to pause the OPR at 2.75% in anticipation that headline and core inflation will continue to ease in 2023.
Core inflation stood at 4.1% in December 2022 while headline inflation has declined to 3.8% from its high of 4.7% in August, Lee said.
“Knock-on effects from China’s reopening, global commodity price developments, and changes in domestic subsidy policies may put pressure on inflation.
“As such, any future OPR hikes will be data-driven,” she added. – Bernama, January 20, 2023
