BNM MAINTAINS OPR AT 3.00 PCT

KUALA LUMPUR, Jan 24 (Bernama) -- Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) has decided to maintain the Overnight Policy Rate (OPR) at 3.00 per cent during its first meeting of the year today, marking the fourth consecutive meeting that the MPC has opted to hold the key rate.

The central bank said in a statement today that at the current OPR level, the monetary policy stance remains supportive of the economy and is consistent with the current assessment of the inflation and growth prospects.

“The MPC remains vigilant on ongoing developments to inform the assessment on the outlook of domestic inflation and growth, and will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability," it said.

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For 2024, BNM said inflation is expected to remain modest, broadly reflecting stable cost and demand conditions, although risks to the inflation outlook remain highly subject to changes to domestic policy on subsidies and price controls, as well as global commodity prices and financial market developments.

“Of note, the government’s intention to review price controls and subsidies in 2024 will affect the outlook for inflation and demand conditions," it added.

Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said BNM's decision to keep the OPR unchanged is anticipated.

He believed the move can be deduced that the benchmark interest rate could stay at 3.00 per cent in the near term, premised on the expected improvement in the economy in 2024 despite uncertainties over inflation that hinge on the subsidy rationalisation and price control measures.

“Overall, we think the monetary policy is already in a restrictive zone with real interest rates currently standing at 1.5 per cent against a long term average of 0.6 per cent.

“Perhaps, the BNM would want to see how the implementation of subsidy rationalisation would affect the overall inflation and therefore, it seems to be quite vigilant in this respect," he told Bernama.

Mohd Afzanizam stressed that a stable OPR would mean the cost of borrowings would remain unchanged and allow households and businesses to make better plans if they decide to relook their liability structure.

"Among the options they can look at is to refinance their liabilities especially when they took financing at a time when interest rates were at a higher trajectory," he added.

-- BERNAMA