BNM maintains OPR at 3.25% amid slower economic growth

November 8, 2018 | By | Reply More

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PETALING JAYA: Bank Negara Malaysia (BNM) decided to maintain the Overnight Policy Rate (OPR) at 3.25% at its Monetary Policy Committee (MPC) meeting today amid slower economic growth.

The central bank said in a statement that at the current level of the OPR, the degree of monetary accommodativeness is consistent with the intended policy stance.

“The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation.”

BNM noted that for the local economy, the latest indicators point towards continued expansion in private sector activity, while private consumption will remain the main driver of growth, supported by conducive labour market conditions.

On the external front, it expects exports to provide an additional lift to growth, albeit to a lesser extent, due to moderating global momentum.

“The domestic economy continues to face downside risks stemming from any further escalation in trade tensions and prolonged weakness in the mining and agriculture sectors. Nevertheless, on balance, the Malaysian economy is expected to remain on a steady growth path in 2018 and 2019.”

While the impact of the consumption tax policy will contribute to higher headline inflation in 2019, BNM believes that it will lapse towards the end of 2019.

“Underlying inflation is expected to remain contained in the absence of strong demand pressures.”

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