{"id":9419,"date":"2021-05-06T20:01:23","date_gmt":"2021-05-06T12:01:23","guid":{"rendered":"https:\/\/newmalaysiatimes.com\/?p=9419"},"modified":"2021-05-06T20:01:24","modified_gmt":"2021-05-06T12:01:24","slug":"bnm-has-confidence-in-monetary-policy-landscape-economist","status":"publish","type":"post","link":"https:\/\/newmalaysiatimes.com\/?p=9419","title":{"rendered":"BNM has confidence in monetary policy landscape – Economist"},"content":{"rendered":"\n

KUALA LUMPUR, May 6 — Bank Negara Malaysia\u2019s (BNM) decision to hold the Overnight Policy Rate (OPR) signals that the central bank has a lot of confidence in its monetary policy landscape to manoeuvre if the need arises to buttress economic outlook in the long run.<\/p>\n\n\n\n

Juwai IQI Global chief economist Shan Saeed said BNM had done plenty of OPR reduction last year and it took a good 12 to 15 months for the policy lever to make its impact on the economy.<\/p>\n\n\n\n

\u201cAt the moment, three good variables are happening, namely, price inflation is well below 2.0 per cent, economy is showing signs of recovery, and export numbers are up for the last four months. <\/p>\n\n\n\n

\u201cGross Domestic Product (GDP) growth outlook stands between 3.0 and 4.0 per cent with potential towards the higher side. We have not changed our forecast for this year\u2019s GDP,\u201d he told Bernama today. <\/p>\n\n\n\n

Thus, he said, BNM did not need to adjust the monetary policy levers as it just needed to wait for fiscal policy stimulus to make impact on the consumers\u2019 aggregate demand to gauge the GDP outlook.<\/p>\n\n\n\n

The central bank\u00a0maintained the OPR\u00a0at 1.75 per cent at its third Monetary Policy Committee (MPC) meeting today.\u00a0<\/p>\n\n\n\n

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

In a statement Thursday, BNM said the MPC considered the stance of monetary policy to be appropriate and accommodative.<\/p>\n\n\n\n

\u201cGiven the uncertainties surrounding the pandemic, the stance of monetary policy going forward will continue to be determined by new data and information and their implications on the overall outlook for inflation and domestic growth,\u201d it said.<\/p>\n\n\n\n

The central bank said it also remained committed to utilise its policy levers as appropriate to foster enabling conditions for a sustainable economic recovery.<\/p>\n\n\n\n

Meanwhile, Malaysian Rating Corporation Bhd (MARC) said BNM was expected to keep the OPR at its historical low of 1.75 per cent for the rest of the year.<\/p>\n\n\n\n

\u201cWith inflation returning, the real interest rate is likely to fall, and as such, further rate cuts will likely be off the table. In any case, there is little sign to suggest that BNM is in any hurry to adjust its policy setting in the immediate term,\u201d it said in a statement. <\/p>\n\n\n\n

On the local currency\u2019s performance, Shan said the ringgit had maintained structural stability and was moving up slowly as the US dollar was going to lose its value in the coming quarters.<\/p>\n\n\n\n

He said the greenback was heading for tail-end risk which would benefit emerging market currencies like South African rand, Indonesian rupiah, Brazilian real, Malaysian ringgit and Russian rouble.<\/p>\n\n\n\n

\u201cWe at Juwai IQI shared in the market as the year commenced that the ringgit\/US dollar would meander around 3.67 to 4.10 and the fair market value of the ringgit against the dollar should fall between 3.80 and 3.95 to make it competitive with regional currencies.<\/p>\n\n\n\n

\u201cThe ringgit is holding on well despite a lot of movement in the global currency market,\u201d he said. <\/p>\n\n\n\n

Moreover, he said, the central bank had the confidence that economic growth was going to bounce back despite the third Movement Control Order (MCO 3.0) since businesses were still operating with standard operating procedures (SOPs) and adherence to guidelines.<\/p>\n\n\n\n

\u201cMCO 3.0 should be short-lived as virus numbers are already on the decline. The government\u2019s handling of the virus is bearing fruits and more people are getting vaccinated. (It\u2019s) good for the economic outlook,\u201d he added.<\/p>\n\n\n\n

— BERNAMA<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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