The Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) has decided to maintain to overnight policy rate (OPR) at the current 1.75%.
In its statement, BNM said that near-term growth in 2021 will be affected by the re-introduction of stricter Covid-19 containment measures, but the impact will be less severe than that of 2020. The growth trajectory is projected to improve from the second quarter onwards, driven by the recovery in global demand, turnaround in public and private expenditure amid continued support from policy measures, and higher production. The roll-out of vaccines in the coming months will also lift sentiments, it said.
“The MPC considers the stance of monetary policy to be appropriate and accommodative,” the statement concluded. “Given the uncertainties surrounding the pandemic, the stance of monetary policy going forward will be determined by new data and information, and their implications on the overall outlook for inflation and domestic growth. The Bank remains committed to utilise its policy levers as appropriate to create enabling conditions for a sustainable economic recovery.”
The OPR was slashed a total of four times in 2020 since starting out the year at 3.0%. It was reduced by 25 basis points in January and again in March, while May saw a huge 50-basis point slash to bring it to 2.0%. In July, it was further reduced to the then record-setting low of 1.75%, with the MPC deciding to maintain this rate at its September and November meetings.