Bank Negara will hold its second monetary policy meeting of the year on March 8 and 9 and is expected to continue with the existing overnight policy rate.
The Bank Negara holds a monetary policy meeting every two months to discuss whether to adjust the overnight policy rate (OPR). The Bank’s last monetary policy meeting fell on January 18 and 19, when the decision was made to maintain the current rate.
It is expected that the NB’s monetary policy meeting on March 8 and 9 will also decide to maintain the current rate, as the NB does not want to increase the borrowing burden as domestic inflation continues to ease.
The overnight policy rate (OPR) is currently at 2.75% p.a. The Bank is expected to raise interest rates by only 0.25% during the year, with a very high probability of a rate hike in the second half of the year, ending the year at 3.00% p.a.
For borrowers, the increase in interest rates by the National Bank will add to their burden. For time deposit depositors, however, a rate hike by national banks would allow them to earn more interest.
