For the second time this year, Bank Negara Malaysia (BNM) has decided to maintain the overnight policy rate at 2.75%, the same as it was back in January. This was announced following a meeting of its monetary policy committee (MPC) today.
According to BNM, at the current OPR level, the stance of monetary policy remains accommodative and supportive of economic growth. However, it noted that the MPC will continue to assess the impact of the cumulative OPR adjustments, given the lag effects of monetary policy on the economy. “The MPC remains vigilant to cost factors, including those arising from financial market developments, that could affect the inflation outlook,” the central back said in a statement.
“Further normalisation to the degree of monetary policy accommodation would be informed by the evolving conditions and their implications to the domestic inflation and growth outlook. The MPC will continue to calibrate the monetary policy settings that balance the risks to domestic inflation and sustainable growth,” it added.
The OPR impacts car loans, as higher rates will result in hire purchase loans becoming more expensive and be harder to gain approval. The Malaysian Automotive Association (MAA) has said it expects car sales to drop this year after a record 2022, with the OPR affecting consumer confidence and their ability to secure car loans.
BNM also said the Malaysian economy is expected to moderate in 2023 amid a slower global economy. Growth will be driven by domestic demand, while household spending will be underpinned by sustained improvements in employment and income prospects.
Additionally, tourist arrivals are expected to continue rising and lift tourism-related activities, and multi-year infrastructure projects will support investment activity. Initiatives laid out in the re-tabled Budget 2023 are also said to provide upside risks to the domestic growth outlook.
On the other hand, downside risks continue to stem mainly from global developments, including from weaker-than-expected growth outturns or much tighter and more volatile global financial conditions. The Malaysian economy expanded by 8.7% last year in 2022, driven by the recovery in private and public sector spending following the full reopening of the economy.
In the global economy, the reopening of China’s economy and better-than-expected growth outturns in major economies were deemed as positive developments. Even so, elevated cost pressures and higher interest rates continue to weigh down the global economy – headline inflation moderated slightly from high levels in recent months, but core inflation remained above historical averages.
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No wonder usd hits 4.52 today
Under PM Muhy & PM Sabri money was flowing in. Under PM Non, money flowing out like no tomorrow. Him & Rafizi can beat UK’s Kwasi Kwarteng in how to screw up the economy within the fastest time.
under sabri usd-myr was 4.7+
There will be PAIN in Ringgit and economy. US Rates are going to Hit 5.25% by June 2023 and expected to hit 6.00% . The HUGE difference will mean FUNDS leaving Malaysia. Stocks, Treasuries, Business, etc will leave Malaysia.Be Prepared.
That’s the thing. They are thinking about short term planning, nobody’s thinking about the long term. And then at one point they realize they made a bad decision then suddenly they will hike like crazy. BNM is really going nuts lately.
itu la…60 years of corruption and 40 years of cheap labor had ruined the life of the ordinary man on the street…..
60 years of corruption cannot beat the 60 days sheer inept running of our beautiful country by a ex con PM. Time to UBAH!
#KjaanGagal
Terrible decision. Now the USD is going to appreciate even more against the Ringgit
Not all are loser in this situation. If you are an exporter using local raw materials, you make more money. If you earning in USD, you also earn more RM.
No such thing as all local raw materials. More than 50% cost for so called local raw materials need imported components, such as machine, oil, spare parts, transportation. If you earn in US $, converted to RM, soon that RM will lose its value because of all the inflation in food and other costs. Also, if you earn in US$, most probably you reduce your price to make your product competitive, so you do not gain much. Worse, because you rely with underpaid labour, and low class equipment, your product will be of lower quality. These are facts, no more theoretical. Malaysia produce low class products whereas Singapore, South Korea, Japan and Taiwan produce world class products, with their strong currencies. Worse, during British Colony, even without any oil revenue, but with strong currencies, Malaya and Borneon states were more advanced than Taiwan, South Korea and even Japan. Look at the facts and realities. Do not use the stupid illogical short term reasons. World Quality sells, mediocre quality does not sell.
“The Malaysian Automotive Association (MAA) has said it expects car sales to drop this year after a record 2022, with the OPR affecting consumer confidence and their ability to secure car loans”….. i don’t think that’s true… when the person is going to burst their DSR, they won’t be taking loans. those buy cars will have excess of money.
If increase rakyat marah,
If maintain ringgit weakened.
Must be hard being BNM