6 May - 2 min read
The Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) has decided to maintain the country’s overnight policy rate (OPR) at 1.75%. The OPR has been maintained at this rate, which is the lowest on record, since July 2020.
According to BNM, latest indicators in Malaysia point to continued improvements in economic activity in the first quarter and into April. “While the recent re-imposition of containment measures in select locations will affect economic activity in the short term, the impact will be less severe as almost all economic sectors are allowed to operate,” the MPC said in its statement. “The growth trajectory is projected to improve, driven by the stronger recovery in global demand and increased public and private sector expenditure amid continued support from policy measures.”
As usual, the MPC highlighted that the growth outlook remains subject to downside risks – namely ongoing uncertainties due to the pandemic and potential challenges in vaccine rollouts. Meanwhile, headline inflation in 2021 is projected to average higher between 2.5% and 4.0%, and anticipated to temporarily spike in the second quarter of 2021. Underlying inflation is expected to remain subdued between 0.5% and 1.5% for the year.
(Source: Bank Negara Malaysia)