RHB | Malaysia | OPR Maintained At 3.25%, But BNM Turning More Cautious As Global Recovery Vulnerable To Increased Downside Risks

Economic Research	10 July 2015
Malaysia
Economic Highlights
OPR Maintained At 3.25%, But BNM Turning More Cautious As Global Recovery Vulnerable To Increased Downside Risks Bank Negara Malaysia's (BNM) Monetary Policy Committee (MPC) decided to keep the Overnight Policy Rate (OPR) unchanged at 3.25% for the sixth consecutive meeting on 9 July (see Figure 1), as the central bank views that underlying inflation is expected to remain contained while domestic demand conditions remain stable. Indeed, the latest indicators point to continued expansion of the economy in 2Q 2015, albeit at a more moderate pace. Growth in private consumption is expected to be slower following the frontloading of consumption activity prior to the implementation of the Goods and Services Tax (GST) in 1Q. Looking ahead, although households are expected to continue adjusting to the GST in the immediate future, but overall spending will be supported by continued wage growth and stable labour market conditions. 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: 08 July: Foreign Exchange Reserves Fell To USD105.5bn As At End-June 03 July: Exports Remained Sluggish In May, On Weak Demand And Lower 01 July: Fitch Affirmed Malaysia’s Credit Rating And Outlook Upgraded To Stable 01 July: Broad Monetary Aggregate Weakened But Loan Growth Held Up In May 19 June: Inflation Picks Up In May, But Overall Demand Pressure Still Subdued 11 June: Industrial Production Eased And Manufacturing Sales Fell In April Post-GST