Adjustments To The OPR Will Be Data-Dependent - BNM Governor
By M. Saraswathi & Karina Imran
KUALA LUMPUR, July 10 (Bernama) – At its current level of 2.75 per cent, the overnight policy rate (OPR) remains appropriate and consistent with Malaysia’s growth and inflation trajectory, said Bank Negara Malaysia Governor Datuk Sri Abdul Rasheed Ghaffour.
He said the central bank will continue to calibrate its monetary policy based on evolving growth and inflation trends, with any future adjustment to the benchmark rate to depend on incoming economic data.
Analysts have projected that the Monetary Policy Committee (MPC) could raise the benchmark rate by 25 basis points to 3.0 per cent at the September or November MPC meeting if Malaysia records stronger-than-expected economic growth.
He said BNM monitors economic conditions continuously using Statistics Department Malaysia (DOSM) data and a wide range of high-frequency indicators to assess the economy in real time.
This includes daily payment transactions, vehicle purchases and electricity consumption, which provide a “now-cast” of current economic activity and enable policymakers to respond promptly to changes in underlying trends.
On whether BNM would consider shifting its policy stance before the end of the year, Abdul Rasheed reiterated that BNM remains data-dependent.
“We monitor a wide range of economic indicators very closely. If there is a shift in the outlook for growth and inflation, we will make adjustments. That is our guiding principle for monetary policy,” he said.
On inflation, Abdul Rasheed said price pressures are expected to edge higher in the coming months amid rising global fuel prices and other cost pressures, but are likely to remain contained and within BNM’s forecast range.
The continued RON95 fuel subsidy and targeted diesel subsidy exemptions have helped cushion the pass-through of higher costs to consumers, while relatively moderate demand has limited businesses’ ability to fully raise prices, he said.
Although 80 per cent of producers have reported higher input costs, most were able to absorb part of the increase; only a small proportion fully passed on the higher costs to consumers.
“We see that price increases are neither pervasive nor persistent. So inflationary pressures are contained,” he added.
While inflation could temporarily exceed the upper end of BNM’s forecast range during certain months this year, Abdul Rasheed said it is expected to moderate subsequently to stay within the central bank’s projected range of 1.5 to 2.5 per cent.
-- BERNAMA