Economic Highlights (Malaysia) - 09/05/2014

The OPR Was Left Unchanged At 3.0% But With Upside Biased

¨        Bank Negara Malaysia's (BNM) Monetary Policy Committee (MPC) opted to maintain the Overnight Policy Rate (OPR) stable at 3.0% on 8 May, marking the 18th successive meeting the Central Bank has kept its OPR unchanged.

¨        The Central Bank warned of signs of continued build-up in financial imbalances amid elevated inflationary pressure. It went further to state that the current monetary and financial conditions could lead to a broader build up in economic and financial imbalances. This could signal a possible introduction of additional macro and micro prudential measures on top of the measures introduced in January 2012 and July 2013 to contain the rising household debt.

¨        The Central Bank also laid the ground for a possible adjustment in monetary accommodation in the near future to ensure the risks arising from the imbalances would not hamper economic growth. This is in line with our expectation of a 25 basis points hike in the Overnight Policy Rate (OPR) toward late 3Q 2014 to 3.25%, after keeping it unchanged at 3.0% for more than two years.

Link to the report:  Economic Highlights - The OPR Was Left Unchanged At 3.0% But With Upside Biased

This message is intended only for the use of the person(s) to whom it is addressed and may contain information that is privileged or otherwise protected from disclosure. If you are not the intended recipient you are hereby notified that any use, review, disclosure or copying of this message and the information it contains is prohibited. If you receive the message in error, please notify the sender by reply e-mail and discard all its contents.   Thank You.