BNM holds OPR steady at 1.75%

by NUR HAZIQAH A MALEK / pic by RAZAK GHAZALI

BANK Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) maintains the Overnight Policy Rate (OPR) at 1.75%.

The central bank in a statement today said, while near-term growth will be affected by the re-introduction of stricter containment measures, the impact will be less severe than that experienced in 2020.

“The growth trajectory is projected to improve from the second quarter onwards.

“The improvement will be driven by the recovery in global demand, turnaround in public and private sector expenditure amid continued support from policy measures, and higher production from existing and new manufacturing and mining facilities,” it said.

It added that downside risks to the outlook remain, coming from ongoing uncertainties surroundings the pandemic and potential challenges that might affect the vaccine rollout globally and domestically.

“In line with earlier assessments, the average headline inflation is expected to be negative in 2020 due mainly to the substantially lower global oil prices.

“For 2021, headline inflation is projected to average higher, primarily due to higher global oil prices,” it said.

Underlying inflation is expected to remain subdued amid continued spare capacity in the economy, while the outlook is subject to global oil and commodity price developments.

“The MPC considers the stance of monetary policy to be appropriate and accommodative.

“Given the uncertainties surrounding the pandemic, the stance of monetary policy going forward will be determined by new data and information, and their implications on the overall outlook for inflation and domestic growth,” it said.