News about BNM

In its recent OPR announcement, BNM highlighted that Malaysia’s GDP measure for 2023 indicates an improvement in the nation’s economic activity.

This is despite calls from some quarters for the central bank to raise the key interest rate to help stabilise the ringgit, which is near a 25-year low against the US dollar.

The last time Bank Negara Malaysia raised the OPR was in May, instituting a 25 bps hike to 3%, from 2.

The projection was driven by the ease of headline inflation year on year (y-o-y)  to 2% in July 2023, from 2.

“Looking ahead, we believe that the BNM will be wary of loosening monetary policy too soon.

This is the third consecutive time that the OPR has been at 3%.

“I am cautiously optimistic on the Malaysia property market going forward in the short-term perspective.

MIDF Research, however, thinks that the steady domestic demand and sticky core inflation that lingered above 3% — as opposed to the pre-pandemic average of 1.

The research house’s view contradicts OCBC’s and UOB’s view that BNM will hold the OPR at 3% for the rest of the year, but aligns with MIDF Research's view that an increment will occur in the second half of the year.

Domestically, the central bank noted that following its strong outturn in the first quarter of the year, the local economy has since expanded at a more moderate pace as exports were weighed down by slower external demand in line with expectations.