Image credit: Edgemarkets
Bank Negara Malaysia has announced the Overnight Policy Rate (OPR) is up by 25 basis points to 3 per cent.
According to the forecast released by Bank Negara Malaysia (BNM) in March 2023, Malaysia’s gross domestic product (GDP) is expected to grow between 4 and 5 per cent in 2023. The expected growth is supported by strong consumer spending, as the job market and wages continue to improve.
During a press conference to announce Bank Negara Malaysia’s 2022 Economic Monitor Report, BNM governor Tan Sri Nor Shamsiah Mohd Yunus stated that Malaysia has been able to weather economic volatility thus far due to stronger than expected growth in hiring and income. The central bank has forecasted that this inflation will remain “elevated” between 2.8 to 3.8 per cent, although it is expected to trend lower by the end of the year.
Image credit: Themalaysianreserve
In the statement released by the Monetary Policy Committee to announce the increase in the benchmark rate, the committee said “It’s important to ensure the OPR will be at the appropriate rate to curtail the effects of prolonged low interest rates (such as too much borrowing).” It also added that the BNM will ensure the OPR will support sustainable growth but at the same time contain inflation.
However, in info graphic to explain this unexpected move, BNM said “At this stage, the OPR is back to the pre-crisis rate and is more in line with the improved state of the economy.”
