The Monetary Policy Committee of Bank Negara Malaysia (BNM) has decided to maintain its overnight policy rate (OPR) at 1.75%.
“For Malaysia, economic activity continues to recover from the trough in April this year. Latest high frequency indicators show that labour market conditions, household spending and trade activity have continued to improve,” said the central bank in its statement today, adding that fiscal stimulus packages alongside monetary and financial measures are also supporting the recovery.
“Looking ahead, the improvement is expected to continue into 2021, supported by the recovery in external demand and expansion in private sector expenditure,” the statement continued. However, BNM highlighted that the pace of recovery will be uneven across sectors, with economic activity in some industries remaining below pre-pandemic levels and a slower improvement in the labour market.
According to Bank Negara, the cumulative 125 basis points reduction in the OPR for the year so far will continue to provide stimulus to the economy. BNM had slashed the OPR by a total of four times this year, starting with the first cut from 3.0% to 2.75% in January and another 25-basis point cut in March. In May, the OPR was slashed by 50 basis points to its lowest level in ten years, and then in July the rate was further reduced to its current record low of 1.75%.
(Source: Bank Negara Malaysia)