Bank Negara announced that the overnight policy rate (OPR) will remain unchanged, that is, at 1.75%.
Bank Negara held a monetary policy meeting (MPC) on March 2 and March 3. After the meeting, a statement was issued stating that the Bank decided to keep the existing overnight policy rate. This is the second time this year that the OPR rate was announced, and the next MPC meeting will be held in May.
The National Bank noted that despite the slowdown in economic activity due to the Omicron outbreak, the overall recovery is still on track. Inflation remains high in many economies due to supply and demand. The military action in Ukraine has been the most significant risk for global trade, commodity prices and financial markets.
Despite the challenging environment, Malaysia is expected to grow at a rate of 3.1% in 2021. Looking ahead, economic growth will be further supported by the opening of the country’s borders, supported by increased spending, an improving labor market and continued policy support. The National Bank forecasts inflation to remain generally moderate.
The National Bank is generally expected to announce an increase in the OPR in the fourth quarter, when mortgage rates and time deposit rates will follow suit.
The current OPR of the National Bank is 1.75% p.a., a rate that has been maintained since July 2020, which is the lowest rate in the country’s history. The low interest rate environment is expected to soothe the financial pressure on the people as their disposable income will increase.
