KUALA LUMPUR, May 8 — Bank Negara Malaysia’s (BNM) decision to maintain the overnight policy rate (OPR) at 3.0 per cent is a cautious approach as the government faces many ongoing global developments and uncertainties, said an economist.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said discussions with the United States (US) officials are in progress, and BNM is taking a stance not to react overly.
"Perhaps, the monetary easing could happen sometime in the second half of the year because if you look at the monetary policy cycle across the globe, it is actually on the way down.
"The US Federal Reserve last year cut 100 basis points, and Indonesia, Thailand, the Philippines, and South Korea cut their interest rates.
"Malaysia is the only country maintaining the OPR at 3.0 per cent. So, given the rising downside risk in the second half, they may be inclined to cut the rates sometime in the second half," he told Bernama following the OPR announcement today.
Afzanizam added that the objective of the interest rate cut is to provide stability and growth and cushion the negative impact on the economy. Therefore, BNM’s intervention is crucial, or the economy could fall further.
At its last meeting on March 6, BNM kept the OPR at 3.0 per cent, unchanged for 12 consecutive meetings since May 2023.
— Bernama
