Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) at its meeting today,decided to maintain the Overnight Policy Rate (OPR) at 1.75 percent.
The MPC considers the stance of monetary policy to be appropriate and accommodative. In addition, fiscal and financial measures will continue to cushion the economic impact on businesses and households and provide support to economic activity.
It said that given the uncertainties surrounding the pandemic, the stance of monetary policy will continue to be determined by new data and information and their implications on the overall outlook for inflation and domestic growth.
The Bank remains committed to utilise its policy levers as appropriate to foster enabling conditions for a sustainable economic recovery
On the global economy, BNM said that it continues to recover, supported by improvements in manufacturing and services activity. “The strength of the recovery remains varied across countries mainly corresponding to their vaccination coverage, relaxation of containment measures and degree of policy support,“ it said.
BNM said that Economies with better progress in their vaccination programmes have eased containment measures, enabling a continued recovery in domestic activity.
However, the recent gradual relaxations for more economic sectors to operate, along with higher adaptability of firms to the new operating environment and continued policy support, would partly mitigate the impact and allow the economy to resume its recovery path.
On inflation, BNM said that year-to-date, headline inflation has averaged 2.3%, and is projected to average between 2.0% and 3.0% for 2021. Underlying inflation, as measured by core inflation, is expected to remain subdued, averaging between 0.5% and 1.5% for the year, amid continued spare capacity in the economy.