Friday, May 9, 2014

Brace for OPR hike soon

PETALING JAYA: A rate hike may be in the cards although Bank Negara has decided to maintain the overnight policy rate (OPR) at 3% following this Thursday’s meeting.
A reading of the last paragraph of the monetary policy statement issued today showed that policymakers have become more worried about financial imbalances amid firm growth prospects and with inflation remaining above its long-run average.
The central bank has not raised the OPR since May 2011.
“Going forward, the degree of monetary accommodation may need to be adjusted to ensure that the risks arising from the accumulation of these imbalances would not undermine the growth prospects of the Malaysian economy,” it said.
It added that while the macro and micro prudential measures have had a moderating impact on the growth of household indebtedness, the current monetary and financial conditions could lead to a broader build up in economic and financial imbalances.

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