BNM maintains OPR at 3.25 per cent

KUALA LUMPUR: Bank Negara Malaysia (BNM) has maintained the Overnight Policy Rate (OPR) at 3.25 per cent after the two-day Monetary Policy Committee ( MPC) meeting which ended yesterday.

At the current OPR level, the degree of monetary accommodativeness is consistent with the intended policy stance, said the central bank.

“The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation,” it added in a statement yesterday.

The MPC meeting is the fifth held this year and the second chaired by newly-appointed Governor Datuk Nor Shamsiah Mohd Yunus.

The central bank will hold another MPC meeting on Nov 8, 2018.

BNM said supply disruptions in the mining and agriculture sectors led to more moderate growth in the second quarter 2018.

On the demand side, growth remained supported by private sector activity with further impetus from net exports.

Looking ahead, it said private consumption, which was boosted by the tax holiday, would continue to be driven by steady wage and employment growth.

“Investment activity is projected to be underpinned by continued capacity expansion in key sectors, particularly in export-oriented industries, driven by favourable demand and efforts to enhance automation.

“Public sector spending, however, is expected to weigh on growth as the government embarks on reprioritisation of expenditure,” it added.

BNM said the external sector would continue to benefit from the sustained global growth momentum.

In the immediate-term, it said the economy faced downside risks stemming from heightened trade tensions, prolonged weakness in the mining and agriculture sectors and some domestic policy uncertainty.

“On balance, the Malaysian economy is expected to remain on a steady growth path,” it said.

On headline inflation, the central bank expected it to edge upwards, taking into consideration the impact of policy measures on domestic cost factors.

“The impact of the changes in the consumption tax policy on headline inflation will be transitory and lapse towards the end-2019.

“Underlying inflation is nevertheless expected to remain relatively stable,” it said, adding that headline inflation stood at 0.9 per cent in July 2018. — Bernama

The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation. BNM

Pau (second left), is pictured with (from left) Sheda Kuching Branch general manager Tan Teck Kian, Lau and Kuching Branch Activities committee member Steve Tan Chen Hang during the press conference yesterday.