BNM Keeps OPR Steady, Signals Confidence In Economy – Economist
By Karina Imran
KUALA LUMPUR, Sept 4 (Bernama) -- Bank Negara Malaysia’s (BNM) decision to keep the overnight policy rate (OPR) unchanged signals confidence that the current economic environment is conducive to supporting growth without risking overheating or financial imbalances, said an economist.
BNM maintained the OPR at 2.75 per cent, following its pre-emptive 25-basis-point cut in July aimed at preserving Malaysia’s steady growth path amid moderate inflation prospects.
Doris Liew, an economist specialising in Southeast Asian development, said the move reflects a firm commitment to monetary stability.
"The current OPR continues to strike a balance between supporting domestic growth and maintaining stability in lending, deposits and overall borrowing costs," she told Bernama.
On July 9, the central bank also announced that the ceiling and floor rates of the OPR corridor were correspondingly reduced to three per cent and 2.5 per cent, respectively.
BNM last kept the OPR at 2.75 per cent in March 2023 before raising it to three per cent in May 2023.
"Following BNM's decision to cut the OPR in July, primarily to cushion the economy against global trade uncertainties and the potential drag from tariff disputes affecting Malaysia’s export-oriented sectors, the policy stance now reflects careful calibration.
"BNM appears intent on anchoring interest rates and inflation expectations while ensuring sufficient support for economic momentum heading into the second half of the year," she said.
Looking ahead, Liew said that barring a significant deterioration in external demand or a sharper-than-expected slowdown in domestic activity, the central bank is likely to maintain its current stance for the remainder of the year.
Meanwhile, IPP Wealth Managers director, investment strategist and country economist Mohd Sedek Jantan said the OPR reflects a supportive stance, amid a resilient domestic economy projected to grow between four and 4.8 per cent in 2025, driven by strong domestic demand and moderate inflation.
He said forward-looking indicators point to sustained household spending and investment continuing to drive expansion without overheating, alongside ongoing support to exports from the technology and tourism sectors.
"Although trade policy developments could still influence global growth prospects, uncertainties have eased to some extent, and contained global costs combined with the absence of excessive domestic demand are expected to limit price pressures.
"By holding steady, BNM preserves policy space to cushion against potential volatility in global demand while ensuring the OPR remains conducive to growth amid price stability, with the bank continuing to monitor global impacts on Malaysia’s economy," he added.
-- BERNAMA