-->

Type something and hit enter

Latest News


On

Bank Negara increases OPR by 25 basis points to support sustainable economic growth

The ceiling and floor rates of the corridor of the OPR are correspondingly increased to 3.00 per cent and 2.50 per cent, respectively.

KUALA LUMPUR: Bank Negara Malaysia (BNM) has increased the Overnight Policy Rate (OPR) by 25 basis points (bps) to 2.75 per cent.

The ceiling and floor rates of the corridor of the OPR are correspondingly increased to 3.00 per cent and 2.50 per cent, respectively.

BNM's Monetary Policy Committee (MPC) decided to adjust further the degree of monetary accommodation against the backdrop of continued positive growth prospects for the Malaysian economy.

"The adjustment would also pre-emptively manage the risk of excessive demand on price pressures consistent with the recalibration of monetary policy settings that balances the risks to domestic inflation and sustainable growth.

"At the current OPR level, the stance of monetary policy remains accommodative and supportive of economic growth," it said in a statement.

BNM noted that the MPC was not on any pre-set course, thus, the monetary policy decisions will continue to depend on evolving conditions and their implications on the overall outlook for domestic inflation and growth.

"Any adjustments to the monetary policy settings going forward would continue to be done in a measured and gradual manner, ensuring that monetary policy remains accommodative to support sustainable economic growth in an environment of price stability," it said.

The central bank said the Malaysian economy's latest indicators showed that economic activity strengthened further in the third quarter (Q3), driven primarily by robust domestic demand.

Despite the challenging global environment, domestic demand will remain the key driver of growth.

It said that household spending would continue to be underpinned by Improvements in labour market conditions and income prospects.

"Nevertheless, external demand is expected to moderate following softening global growth.

"Despite bouts of heightened volatility in the global financial and foreign exchange markets, these developments are not expected to derail Malaysia's growth," it said, adding that domestic liquidity remains sufficient.

As for financial institutions, Bank Negara said they also continue to operate with strong capital and liquidity buffers.

Downside risks to the domestic economy continued to stem from weaker-than-expected global growth, higher risk aversion in global financial markets amid more aggressive monetary policy tightening in major economies, further escalation of geopolitical conflicts, and worsening supply chain disruptions.

It added that headline inflation is likely to have peaked in 3Q 2022 and is expected to moderate after that, albeit remaining elevated.

"Underlying inflation, as measured by core inflation, is projected to average closer to the upper end of the 2.0 per cent - 3.0 per cent forecast range in 2022, having averaged 2.7 per cent year-to-date, given some demand-driven price pressures amid the high-cost environment," it noted.

The central bank said headline and core inflation are expected to remain elevated moving into 2023 amid demand and cost pressures and any changes to domestic policy measures.

"The balance of risk to the inflation outlook in 2023 is tilted to the upside and continues to be subject to domestic policy measures on subsidies, as well as global commodity price developments arising mainly from the ongoing military conflict in Ukraine and prolonged supply-related disruptions," said BNM.

https://www.nst.com.my/business/2022/11/846508/bank-negara-increases-opr-25-basis-points-support-sustainable-economic

Back to Top
Back to Top