Bank Negara keeps OPR at 2.75% – surprises analysts

Bank Negara keeps OPR at 2.75% – surprises analysts

In a surprising move, Bank Negara (BNM) announced it will maintain the overnight policy rate (OPR) at 2.75% following a meeting of its monetary policy committee (MPC) on January 19, 2023. This is the opposite of what most analysts predicted, which is an increase in OPR by 0.25% in January, followed by another 0.25% hike in March.

At the start of 2022, the OPR was at 1.75% and remained that way after the MPC convened on March 3. The first of four OPR hikes – each by 0.25% – was on May 11, which was then followed by increases on July 6, September 8 and November 3.

Referring to BNM data, the OPR was at its highest at 3.5% from April 26, 2006 to November 24, 2008. Meanwhile, the OPR was at its lowest at 1.75% from July 7, 2020 to May 11, 2022 as the country battled the Covid-19 pandemic.

The OPR has an impact on car loans, which may see hire purchase loans become more expensive. The Malaysian Automotive Association (MAA) has said it expects car sales to drop this year after a record 2022, with the OPR dampening consumer confidence and their ability to secure car loans.

According to BNM’s release, the latest data indicates Malaysia experienced continued economic expansion in the final quarter of last year on account of resilient domestic demand. As a result, growth for 2022 is expected to exceed the earlier projected range of 6.5-7.0%, although this is expected to moderate amid a slower global economy.

The central bank also noted that headline inflation has averaged 3.4% for the period January-November 2022. As projected, headline inflation peaked in 3Q 2022, while underlying inflation, as measured by core inflation, has averaged 2.9% up to November 2022.

This year, headline and core inflation are expected to moderate but remain at elevated levels due to lingering demand and cost pressures. Existing price controls and fuel subsidies, along with remaining spare capacity in the economy, will continue to partly contain the extent of upward pressures to inflation, it added.

Looking to sell your car? Sell it with Carro.

10% discount when you renew your car insurance

Compare prices between different insurer providers and use the promo code 'PAULTAN10' when you make your payment to save the most on your car insurance renewal compared to other competing services.

Car Insurance

Gerard Lye

Originating from the corporate world with a background in finance and economics, Gerard’s strong love for cars led him to take the plunge into the automotive media industry. It was only then did he realise that there are more things to a car than just horsepower count.



  • Gabriel on Jan 26, 2023 at 4:32 pm

    This is good strategy heading into the States election. Let’s make sure we can make PH win the election first.
    We can raise the OPR after that election.

    Like or Dislike: Thumb up 9 Thumb down 17
  • Raising and reducing OPR is a gimmick tool used by the West aiming to plunder the wealth of the working class in the Western world… The PH government do not necessarily follow this type of unethical policy

    Like or Dislike: Thumb up 6 Thumb down 3

Add a comment