{"id":14828,"date":"2022-09-08T17:13:53","date_gmt":"2022-09-08T09:13:53","guid":{"rendered":"https:\/\/newmalaysiatimes.com\/?p=14828"},"modified":"2022-09-08T17:13:54","modified_gmt":"2022-09-08T09:13:54","slug":"bank-negara-raises-opr-by-25-basis-points-to-2-50-per-cent","status":"publish","type":"post","link":"https:\/\/newmalaysiatimes.com\/?p=14828","title":{"rendered":"Bank Negara raises OPR by 25 basis points to 2.50 per cent"},"content":{"rendered":"\n

KUALA LUMPUR, Sept\u00a08\u00a0<\/strong>—\u00a0Bank Negara Malaysia (BNM) has increased the Overnight Policy Rate (OPR) by 25 basis points to 2.50\u00a0per cent at its\u00a0fifth\u00a0Monetary Policy Committee (MPC) meeting today.<\/p>\n\n\n\n

The central bank said the ceiling and floor rates of the corridor of the OPR are correspondingly increased to 2.75 per cent and 2.25 per cent respectively.<\/p>\n\n\n\n

\u201cThe global economy continued to expand, albeit at a slower pace, weighed\u00a0down by rising cost pressures, tighter global financial conditions\u00a0and strict\u00a0containment measures in China.”<\/em><\/p>\n\n\n\n

\u201cHowever, global growth continues to be\u00a0supported by improvements in labour market conditions\u00a0and the full reopening\u00a0of most economies and international borders,\u201d\u00a0<\/em>BNM said in its monetary policy statement today after the two-day policy meeting which began on\u00a0Sept\u00a07.<\/p>\n\n\n

\n
\"opr\"<\/figure><\/div>\n\n\n

BNM noted that inflationary pressures have remained high, due to elevated commodity prices and tight labour markets, despite continued easing in global supply chain conditions.<\/p>\n\n\n\n

Consequently, it said central banks are expected to continue adjusting their monetary policy settings, some at a faster pace, to reduce inflationary pressure.<\/p>\n\n\n\n

In particular, it said aggressive adjustments in the United States (US) interest rates have contributed to a strong US dollar environment and this has resulted in higher volatility in financial markets, affecting other major and emerging market currencies, including the ringgit.<\/p>\n\n\n\n

\u201cGoing forward, global growth is expected to face challenges from the impact of monetary policy tightening in most economies\u00a0and pandemic management measures in China.”<\/em><\/p>\n\n\n\n

\u201cThe growth outlook is subject to downside risks, including elevated cost pressures, the potential energy crisis in Europe\u00a0and sharp tightening in financial market conditions,\u201d<\/em> BNM said.<\/p>\n\n\n\n

Malaysia\u2019s transition to endemicity and policy measures contribute to strong growth<\/strong><\/p>\n\n\n\n

For the Malaysian economy, the transition to endemicity and policy measures have contributed to the stronger growth performance in the second quarter of 2022, with indicators pointing to continued growth, underpinned by support from private sector spending going forward, BNM shared.<\/p>\n\n\n\n

\u201cLabour market conditions and income prospects also remained positive, with unemployment and underemployment declining further.\u00a0The reopening of international borders will lift tourism-related sectors. Investment activity and prospects would be supported by the realisation of multiyear projects.”<\/em><\/p>\n\n\n\n

\u201cNevertheless, the external demand is expected to moderate following softening global growth. Despite the increased volatility in the global financial and foreign exchange markets, these developments are not expected to derail Malaysia’s growth,\u201d<\/em> BNM noted.<\/p>\n\n\n\n

It said domestic liquidity remained sufficient, with the continued orderly functioning of the financial and foreign exchange markets.<\/p>\n\n\n\n

Financial institutions also continue to operate with strong capital and liquidity buffers and these will ensure financial intermediation remains supportive of the economy, BNM said.<\/p>\n\n\n\n

\u201cGoing forward, downside risks to the domestic economy continue to stem from a weaker-than-expected global growth, further escalation of geopolitical conflicts\u00a0and worsening supply chain disruptions,\u201d<\/em> the central bank said.<\/p>\n\n\n\n

Headline inflation averaged at 2.8 per cent<\/strong><\/p>\n\n\n\n

Year-to-date, BNM said headline inflation has averaged at 2.8 per cent and is projected to peak in the third quarter this year (Q3 2022) before moderating thereafter, due to dissipating base effects and in line with the expected easing of global commodity prices.<\/p>\n\n\n\n

Underlying inflation, as measured by core inflation, is expected to average closer to the upper end of the 2.0 to 3.0 per cent forecast range in 2022, with some signs of demand-driven pressures amid the high-cost environment, it said.<\/p>\n\n\n\n

\u201cThe extent of upward pressures to inflation will remain partly contained by existing price controls, fuel subsidies, and the prevailing spare capacity in the economy.”<\/em><\/p>\n\n\n\n

\u201cThe inflation outlook, however, continues to be subject to domestic policy measures\u00a0as well as global commodity price developments arising mainly from the ongoing military conflict in Ukraine and prolonged supply-related disruptions,\u201d<\/em> BNM shared.<\/p>\n\n\n\n

With the positive growth prospects for the Malaysian economy remaining intact, it said the MPC decided to further adjust the degree of monetary accommodation and at the current OPR level, the stance of monetary policy continues to remain accommodative and supportive of economic growth.<\/p>\n\n\n\n

The central bank said the MPC is not on any preset course and will continue to assess evolving conditions and their implications on the overall outlook for domestic inflation and growth.<\/p>\n\n\n\n

\u201cAny adjustments to the monetary policy settings going forward would be done in a measured and gradual manner, ensuring that monetary policy remains accommodative to support a sustainable economic growth in an environment of price stability,\u201d<\/em> it added.<\/p>\n\n\n\n

NMT<\/a> as reported by Bernama<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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