Bank Negara maintains OPR at 1.75%


KUALA LUMPUR: Bank Negara has maintained its in a single day coverage price (OPR) at 1.75%, according to the consensus expectation of economists surveyed in a Reuters ballot.

In an announcement, the central financial institution mentioned the financial coverage committee considers the present stance of financial coverage to be “acceptable and accommodative”.

Citing the newest high-frequency indicators, Bank Negara mentioned financial exercise rebounded within the fourth quarter according to the comfort of containment measures.

For 2021, development is projected to be within the vary of three% to 4%.

“Looking forward, development is anticipated to achieve additional momentum in 2022.

“This shall be pushed by the enlargement in international demand and better personal sector expenditure amid enhancements within the labour market and continued coverage assist,” mentioned the central financial institution.

However, it added that dangers to the expansion outlook stay tilted to the draw back, arising from weaker-than-expected international development, a worsening in provide chain disruptions and the emergence of extreme and vaccine-resistance Covid-19 variants of concern.

On inflation, Bank Negara mentioned headline inflation averaged 2.3% from the January to November interval in 2021.

The common headline inflation is anticipated to stay average in 2022 as the bottom impact from gas inflation dissipates.

Underlying inflation as measured by core inflation in the meantime is anticipated to edge upwards because the financial exercise normalises amid the surroundings of excessive enter prices.

Core inflation is anticipated to be modest with upside threat contained by the continued slack within the financial system and labour market.

“The outlook, nevertheless, continues to be topic to international commodity worth developments amid dangers from extended supply-related disruptions,” mentioned Bank Negara.

Malaysia’s OPR was lower to 1.75% from 2% in July 2020 because the central financial institution moved to offer extra coverage stimulus to speed up the tempo of financial restoration in gentle of the affect of the Covid-19 pandemic and subsequent lockdowns.

Most analysts are of the view that there may very well be a rise within the rate of interest within the second half of 2022 as financial exercise strikes in direction of normalcy.

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