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KUALA LUMPUR (September 10): Bank Negara Malaysia (BNM) Monetary Policy Committee (MPC) decision to keep the Overnight Monetary Policy Rate (OPR) at 1.75 percent is considered a “moderate pause ”.
Maybank Investment Bank Research (Maybank IB Research) said the decision supports the baseline recovery forecast in 2021 and reflects signs that the recession worsened but bottomed in the second quarter (April) with the prospect of a shallower recession in the second quarter (April). third quarter of the year.
“Furthermore, market conditions have improved while monetary and financial conditions have relaxed. The stock market, bond market and ringgit against the US dollar have improved since the March sell-offs, ”he said in a statement today.
Maybank IB Research added that the move was in line with other regional central banks such as Bank Indonesia and Bangko Sentral ng Pilipinas (BSP), which also kept their interest rates unchanged after cuts of more than 100 basis points to date.
“We expect the OPR to remain at 1.75% until the end of 2021,” the research house said.
Meanwhile, OCBC Bank stated that BNM was unlikely to lower the IPO further unless the outlook unexpectedly turns bleaker.
“If everything goes as expected in the coming months, (BNM) should maintain its OPR at 1.75 percent at the next and last MPC meeting for the year in November,” he said.
The bank added that while the MPC statement suggests some caution regarding the economic recovery, noting the uneven nature of the rebound and how downside risks persist, there were signs of recovery momentum for BNM to take comfort that it has done the right thing. enough so far.
“Perhaps, like a good physician, BNM does not see the need to over-prescribe drugs if the patient is already recovering on the existing combination,” he added.
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