BNM holds OPR steady at 1.75%


BANK Negara Malaysia maintained the Overnight Policy Rate (OPR) at 1.75% which was unchanged since July 2020.

In a statement today the central bank said headline inflation has averaged 2.3% for the period January-November 2021.

For 2022, average headline inflation is likely to remain moderate as the base effect from fuel inflation dissipates.

“Underlying inflation, as measured by core inflation, is expected to edge upwards as economic activity normalizes amid the environment of high input costs. Nevertheless, core inflation is expected to be modest, with upside risk contained by the continued slack in the economy and labor market.

The outlook, however, continues to be subject to global commodity price developments amid risks from prolonged supply-related disruptions,” BNM said.

BNM added Malaysia’s latest high-frequency indicators show that economic activity rebounded in the fourth quarter, in line with the relaxation of containment measures. “For 2021, growth will be within the projected range of 3% – 4%.

“Looking ahead, growth is expected to gain further momentum in 2022. This will be driven by the expansion in global demand and higher private sector expenditure amid improvements in the labour market and continued policy support,” said BNM.

It added risks to the growth outlook and remained tilted to the downside which may arise from a weaker-than-expected global growth, a worsening in supply chain disruptions, and the emergence of severe and vaccine-resistant COVID-19 variants of concern.