The Monetary Policy Committee (MPC) of Bank Negara Malaysia has decided to maintain the Overnight Policy Rate (OPR) at 3.00 percent following its meeting today.
Amidst a backdrop of moderate global economic expansion, supported by domestic demand and improved trade activity, the decision to hold the OPR steady reflects the committee’s assessment of both inflation and growth prospects.
While some countries are experiencing favorable labor market conditions bolstering consumption activity, risks to global growth persist, including geopolitical tensions and volatility in financial markets.
In Malaysia, the economy expanded by 3.7% in 2023, and growth is expected to improve in 2024, driven by a recovery in exports and resilient domestic expenditure.
Export growth is expected to be supported by stronger global trade, while continued employment and wage growth will underpin household spending.
Investment activity is also expected to receive a boost from ongoing projects in both the private and public sectors.
Inflation in January 2024 stood at 1.5% for headline inflation and 1.8% for core inflation, in line with expectations.
The outlook for inflation in 2024 remains moderate, contingent upon stable demand conditions and controlled cost pressures, although it is subject to domestic policy implementations and global commodity prices.
The ringgit is currently considered undervalued, prompting coordinated efforts by the Government and Bank Negara Malaysia to encourage repatriation and conversion of foreign investment income by Government-Linked Companies (GLCs) and Government-Linked Investment Companies (GLICs).
These actions aim to bolster inflows and support a stronger ringgit over the medium term.
With the current OPR level deemed supportive of the economy and consistent with inflation and growth prospects, the MPC remains vigilant to ongoing developments.
The committee affirms its commitment to ensuring a monetary policy stance conducive to sustainable economic growth and price stability.
