Standard Chartered Global Research: BNM To Likely Keep OPR Unchanged At 3.0 Pct
KUALA LUMPUR, Jan 21 (Bernama) -- Standard Chartered Global Research expects Bank Negara Malaysia (BNM) to keep the overnight policy rate (OPR) unchanged at 3.0 per cent at its monetary policy decision on Jan 22.
In a research note today, the research house said that with robust growth and manageable inflation, a status-quo decision would not be a surprise; while the fourth quarter 4Q of 2024’s gross domestic product (GDP) growth slowed, it remained decent at 4.8 per cent year-on-year.
“Focus will be on the central bank’s characterisation of recent ringgit performance.
“As the ringgit outperformed regional foreign exchange through the first nine months of 2024, BNM’s assessment of the ringgit evolved towards becoming more comfortable -- from “undervalued” in March to “does not reflect ... fundamentals” in May, to simply noting that it is driven by external factors in July through November,” it said.
Standard Chartered Global Research said the ringgit has depreciated 8.3 per cent against the US dollar since end-September 2024 and is the underperformer in the region.
It said that the ringgit is undervalued, as mentioned by Economy Minister Rafizi Ramli, while BNM governor Datuk Seri Abdul Rasheed Ghaffour mentioned that the central bank is ready to use policy levers to manage the risk of excessive volatility in the foreign exchange market.
“We expect rhetoric on foreign exchange to turn hawkish, with BNM likely reiterating its engagement with stakeholders to support the ringgit.
“However, the central bank may not go as far as to say that the ringgit is undervalued, given that as of Jan 7, the ringgit nominal effective exchange rate (NEER) was about 3.8 per cent above its 10-year average,” it added.
-- BERNAMA