BNM keeps OPR unchanged at 3.25%, says Malaysian economy's prospects remain strong

KUALA LUMPUR (May 10): Bank Negara Malaysia's (pictured) monetary policy committee has decided today to maintain the overnight policy rate (OPR) at 3.25%, as it is of the view that overall prospects for the Malaysian economy remain strong.

In a statement, the central bank said the latest indicators point towards continued expansion in private sector activity and exports for the Malaysian economy.

"Going forward, the positive growth momentum is expected to be sustained, driven by the strength in both domestic and external demand. Private consumption will be supported by favourable income and labour market conditions.

"Investment activity is projected to be sustained by the implementation of ongoing infrastructure projects and capacity expansion by firms," said Bank Negara.

Exports should also continue to benefit from the positive momentum in global growth and trade in advanced and regional economies, it said.

"Overall, the prospects for the Malaysian economy remain strong," it said, adding headline inflation is expected to remain moderate for the year as a whole, on expectations of a smaller effect from global cost factors.

It also noted that a stronger ringgit exchange rate compared to 2017 will mitigate import costs, while underlying inflation, as measured by core inflation, is projected to remain moderate amid stable demand conditions.

"At the current level of the OPR, the degree of monetary accommodativeness is consistent with the policy stance to ensure that the domestic economy continues on a steady growth path amid lower inflation. The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation," it added. — theedgemarkets.com

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