BNM Maintains OPR Unchanged At 3.0 Pct

KUALA LUMPUR, Nov 6 (Bernama) -- Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) has decided to maintain the Overnight Policy Rate (OPR) at 3.00 per cent at its meeting today.

BNM highlighted that the global economy continues to expand amid resilient labour markets and continued recovery in global trade. 

“Looking ahead, global growth is expected to be sustained by positive labour market conditions, moderating inflation and less restrictive monetary policy,” it said in a statement today.

BNM said the global trade recovery is expected to continue, supported by both electrical and electronics (E&E) as well as non-E&E products.

However, the central bank emphasised that the growth outlook remains subject to downside risks, mainly from further escalation of geopolitical tensions, heightened volatility in global financial markets, and slower growth momentum in major economies.

Commenting on the Malaysian economy, BNM said the latest indicators point towards sustained strength in economic activity, driven by resilient domestic expenditure and higher export activity.

“Going forward, exports are expected to be supported by the global tech upcycle, continued strength in non-E&E goods, and higher tourist spending,” it said.

BNM also said that employment and wage growth, as well as policy measures, remain supportive of household spending.

“The robust expansion in investment activity would be sustained by the progress of multi-year projects in both the private and public sectors, the higher realisation of approved investments, as well as the implementation of catalytic initiatives under the national masterplans.

“These investments, supported by higher capital imports, will raise exports and expand the economy's productive capacity,” BNM added.

At the same time, the central bank said the measures outlined under Budget 2025 are expected to provide additional support to growth.

“The growth outlook is subject to downside risks from lower-than-expected external demand and commodity production,” it said.

Meanwhile, upside risks to growth mainly emanate from greater spillover from the tech upcycle, more robust tourism activity, and faster implementation of investment projects.

It said headline and core inflation remain modest, averaging at 1.8 per cent year-to-date.

Going into 2025, inflation is expected to remain manageable amidst easing global cost conditions and the absence of excessive domestic demand pressures.

Nevertheless, it said the inflation outlook remains subject to the implementation of announced domestic policy measures, while the upside risk to inflation would be dependent on the extent of spillover effects of domestic policy measures, as well as global commodity prices and financial market developments.

On the ringgit’s performance, BNM said the local currency continues to be primarily driven by external factors.

“The outcome of the United States elections could heighten volatility in the near term. Looking ahead, the narrowing interest rate differentials between Malaysia and the advanced economies are positive for the ringgit,” it added.

BNM also said that Malaysia’s favourable economic prospects and domestic structural reforms, complemented by ongoing initiatives to encourage flows, will provide enduring support to the ringgit.

At the current OPR level, the monetary policy stance remains supportive of the economy and is consistent with the current assessment of inflation and growth prospects.

“The MPC remains vigilant to ongoing developments to guide its assessment of the domestic inflation and growth trajectories going into 2025, and will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability,” it said.

Today’s MPC meeting was the last one for this year, and the meeting also approved the schedule for six MPC meetings for 2025, namely Jan 22, March 6, May 8, July 9, Sept 5, and Nov 6, in accordance with the Central Bank of Malaysia Act 2009.

-- BERNAMA