Fwd: RHB | Malaysia | BNM Raises Rates Amid Strong Economic Activity

 

Economic Research			26 January 2018
Malaysia
Economic Update
BNM Raises Rates Amid Strong Economic Activity   Following up on its hawkish statement in its last meeting, the central bank's MPC decided to raise the OPR to 3.25% on 25 Jan. It cited the reasons for this, ie the steady growth path for the economy, and as a pre-emptive move to prevent a build-up of risks that could arise from low interest rates for a prolonged period of time. Looking forward, we believe that BNM would likely pause in its tightening after the hike, and maintain the OPR at 3.25% for the rest of 2018. Additionally, the MPC stated that it will continue to assess the balance of risks surrounding the outlook for domestic growth and inflation. With the MYR appreciating by 2.3% YTD also representing a form of monetary tightening, we believe the risk of further rate hikes are contained, for now. Economists: Vincent Loo Yeong Hong  | +603 9280 2172 Aris Nazman Maslan  | +603 9280 2184
To access our recent reports please click on the links below:   24 Jan : 2017 Inflation – Highest In Nine Years 23 Jan : Consumer Confidence Strongest In Three Years 11 Jan : Stronger Manufacturing Activity Lifts IPI in November 08 Jan : Higher Forex Reserves Amid Wider Current Account Surplus 08 Jan : November Export Growth Healthy Albeit Slow
Economics Team
Arup Raha	Group Chief Economist	arup.raha@rhbgroup.com		+65 6232 3896
Peck Boon Soon	Chief ASEAN Economist	bspeck@rhbgroup.com		+603 9280 2163
Vincent Loo Yeong Hong	Malaysia, Vietnam,	vincent.loo@rhgroup.com		+603 9280 2172
Ng Kee Chou	Singapore, Thailand	ng.kee.chou@rhbgroup.com		+603 9280 2179
Rizki Fajar	Indonesia, Philippines	rizki.fajar@rhbgroup.com		+6221 2970 7065
Aris Nazman Maslan	Malaysia, Vietnam	mohd.aris.nazman@rhbgroup.com		+603 9280 2184