malaysiang
KUALA LUMPUR, 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.
In a statement, the central bank said that 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.
BNM also said that the global economy continues to expand amid resilient labour markets and continued recovery in global trade.
‘Global growth is expected to be sustained by positive labour market conditions, moderating inflation and less restrictive monetary policy.
‘Global trade recovery is expected to continue, supported by both electrical and electronics (EandE) as well as non-EandE products,’ BNM said.
It said that the growth outlook remains subject to downside risks, mainly from further escalation of geopolitical tensions, volatility in global financial markets, and slower growth momentum in major economies.
BNM said that
the Malaysian economy expanded by 5.1 per cent in the first half of 2024 (1H 2024), driven by resilient domestic expenditure and higher export activity.
‘Going forward, exports are expected to be further lifted by the global tech upcycle given Malaysia’s position in the semiconductor supply chain, as well as continued strength in non-EandE goods.
‘Tourist spending is expected to continue to increase,’ it said, adding that employment and wage growth, as well as policy measures, remain supportive of household spending.
Additionally, the robust expansion in investment activity would be sustained by the progress of multi-year projects in both the private and public sectors, the implementation of catalytic initiatives under the national master plans, as well as the higher realisation of approved investments, it said.
Moreover, BNM said that the higher intermediate and capital imports would further support export and investment activity.
‘The growth outlook is subject to downside risks from lower-than-expected
external demand and commodity production.
‘Meanwhile, upside risks to growth mainly emanate from greater spillover from the tech upcycle, more robust tourism activity, and faster implementation of investment projects,’ said BNM.
On the ringgit, it said that the recent recovery is driven by the shift in expectations of lower interest rates in major economies, particularly the United States, as well as Malaysia’s strong economic performance.
‘Malaysia’s positive economic prospects and domestic structural reforms, complemented by ongoing initiatives to encourage flows, will continue to provide enduring support to the ringgit,’ noted BNM.
It said that the MPC remains vigilant to ongoing developments to inform the assessment of the domestic inflation and growth trajectories going into 2025.
‘The MPC will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability,’ said BNM.
Source: BERNAMA News Agency
