KUALA LUMPUR, 10 September – Bank Negara Malaysia (BNM) has maintained the Overnight Policy Rate (OPR) at 1.75 per cent at its fifth Monetary Policy Committee (MPC) meeting today.
“The MPC considers the stance of monetary policy to be appropriate and accommodative.
“In addition, fiscal and financial measures will continue to cushion the economic impact on businesses and households and provide support to economic activity,” it said in a statement today.
The OPR has remained at 1.75 per cent since July 7, 2020.
BNM said given the uncertainties surrounding the pandemic, the stance of monetary policy would continue to be determined by new data and information and their implications on the overall outlook for inflation and domestic growth.
The central bank said it remained committed to utilise its policy levers as appropriate to foster enabling conditions for a sustainable economic recovery.
On the Malaysian economy, it said the re-imposition of nationwide containment measures to curb the resurgence in COVID-19 cases had dampened the growth momentum.
“However, the recent gradual relaxations for more economic sectors to operate, along with higher adaptability of firms to the new operating environment and continued policy support, would partly mitigate the impact and allow the economy to resume its recovery path.
“Moving forward, the further easing of containment measures, rapid progress of the domestic vaccination programme and continued expansion in global demand will support the growth momentum going into 2022,” BNM said.
It said risks to the growth outlook, however, remained tilted to the downside due to external and domestic factors.
These include delays in the easing or re-imposition of broad-based containment measures due to the impact of new COVID-19 variants of concern and a weakerthan-expected global growth recovery.
Year-to-date, headline inflation has averaged 2.3 per cent, and is projected to average between 2.0 per cent and 3.0 per cent for 2021.
Underlying inflation, as measured by core inflation, is expected to remain subdued, averaging between 0.5 per cent and 1.5 per cent for the year, amid continued spare capacity in the economy.
“The outlook, however, continues to be subject to global commodity price developments and policy measures to alleviate the cost burden of the public.
“Underlying inflation, however, is expected to remain relatively subdued in 2022,” BNM said.
Meanwhile, the global economy continues to recover, supported by improvements in manufacturing and services activity.
According to BNM, the strength of the recovery remains varied across countries, mainly corresponding to their vaccination coverage, relaxation of containment measures and degree of policy support.
“Overall, the balance of risks to the global growth outlook is tilted to the downside.
“This is attributed mainly to uncertainty over the path of the pandemic amid the emergence of variants of concern, and potential risk of heightened financial market
volatility amid adjustments in monetary policy in major economies,” it said.