BNM maintains OPR at 1.75%, as expected

by PRIYA VASU

MONETARY Policy Committee (MPC) of Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 1.75% at its second meeting this year.

In a statement today, the central bank said the global economic recovery continues to strengthen, particularly in the major economies, supported by improvements in manufacturing and trade activity, although the pace may vary across countries. 

“The ongoing roll-out of vaccination programmes and sizable fiscal stimulus measures in the US as well as policy support in other major economies will further facilitate an improvement in domestic demand,

“However the recovery trajectory in some economies could be disrupted by a re-tightening of containment measures to curb Covid-19 resurgences,” said BNM. 

The central bank further noted the recent financial market volatility has somewhat receded, and financial conditions remain supportive of growth. 

“The balance of risks to the growth outlook remains tilted to the downside, due mainly to uncertainty over the path of the pandemic as well as potential risks of heightened financial market volatility,” noted BNM.

For Malaysia, latest indicators point to continued improvements in economic activity in the first quarter and into April. 

While the recent re-imposition of containment measures in select locations will affect economic activity in the short term, the impact will be less severe as almost all economic sectors are allowed to operate. 

The growth trajectory is projected to improve, driven by the stronger recovery in global demand and increased public and private sector expenditure amid continued support from policy measures.