RHB | Malaysia | The OPR Was Held Stable At 3.25%

Economic Research	08 May 2015
Malaysia
Economic Highlights
The OPR Was Held Stable At 3.25% Bank Negara Malaysia's (BNM) Monetary Policy Committee (MPC) decided to keep the Overnight Policy Rate (OPR) unchanged at 3.25% for the fifth consecutive meeting on 7 May (see Figure 1). This suggests that the Central Bank remains wary on the downside risks of the global economy as it emphasised that the downside risks to the global economic outlook continue to persist despite the global growth improving at a moderate pace. In this environment, the international financial markets will continue to be affected by shifts in global liquidity and investors sentiments, according to the Central Bank. There is no strong reason for the Central Bank to cut interest rates at this juncture also, as the prospects are for the Malaysian economy to still remain on a steady growth path. BNM continues to reiterate that although private consumption is expected to moderate as households adjust to the introduction of the Goods and Services Tax (GST), consumption expenditure will be supported by the steady rise in incomes and employment. Investment activity is expected to be led by capital spending in the export-oriented industries, the services sector and for infrastructure projects, which will cushion the impact of the lower oil and gas-related investment activity. While export growth will be affected by lower commodity prices, manufactured exports will continue to benefit from the improvement in economic activity in several advanced economies and the sustained growth in Asia. Economist:  Peck Boon Soon  | +603 9280 2163 Economist:  Vincent Loo Yeong Hong  | +603 9280 2172
To access our recent reports please click on the links below: 07 May: Exports Rebounded In March After Festivities In February 30 Apr: Broad Monetary Aggregate And Loan Growth Picked Up In March 29 Apr: ETP Report Card – Improved Results In The Fourth Year, More Efforts Needed To Achieve A High Income Nation By 2020 23 Apr: Business Conditions Picked Up But Consumer Sentiment Fell Further In 1Q 22 Apr: Inflation Picked Up In March Amid Increase In Fuel Prices 13 Apr: Commodity Trade Surplus Remains The Saviour Of The Current Account Surplus In 1Q 2015