Monday, May 15, 2017

BNM Maintains OPR While Reiterating Positive Outlook

Economic Research
15 May 2017

Economic Update

Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) kept the overnight policy rate (OPR) unchanged at 3% for its fifth straight meeting on 12 May, as per expectations. We are of the view that BNM is likely to maintain OPR at the current level of 3% in 2017 on account of:
1.   Expectations of sustained economic growth;
2.   MYR still weak despite recent strength;
3.   Downside risks to global growth persist; and
4.   Higher inflationary pressures.
Although inflationary pressure has increased, it is mainly cost-push in nature. Thus, it does not warrant a tightening of the monetary policy by the Central Bank.

Economist:  Vincent Loo Yeong Hong  | +603 9280 2172
Economist:  Aris Nazman Maslan  | +603 9280 2184

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