Standard Chartered: BNM may hike OPR in January

KUALA LUMPUR (Nov 10): Standard Chartered Bank said Bank Negara Malaysia (BNM) is expected to hike the overnight policy rate (OPR) in January 2018, mainly due to the central bank’s “hawkish intent”.

Standard Chartered wrote this in a note today following BNM's monetary policy statement yesterday. BNM said it had decided to maintain the OPR at 3%.

BNM said: "At the current level of the OPR, the stance of monetary policy remains accommodative. Given the strength of the global and domestic macroeconomic conditions, the Monetary Policy Committee may consider reviewing the current degree of monetary accommodation. This is to ensure the sustainability of the growth prospects of the Malaysian economy."

Today, Standard Chartered said: "BNM struck a hawkish note at its latest monetary policy meeting on Nov 9. In the key policy guidance paragraph, BNM noted that 'the Monetary Policy Committee may consider reviewing the current degree of monetary accommodation'. We now expect the central bank to hike rates in January primarily due to its hawkish intent."

Standard Chartered said it is "less bullish" than BNM on economic growth. Standard Chartered also said it does not expect inflation to threaten Malaysia's medium-term price stability

"Furthermore, we do not think this is the start of a hiking cycle. In fact, we think if BNM refrains from hiking in January, waning growth momentum may prevent it from hiking in 2018," Standard Chartered said. — theedgemarkets.com

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