KUALA LUMPUR, May 27 — Short-tenured interbank rates are expected to remain stable next week with Bank Negara Malaysia (BNM) continuing to intervene by mopping up excess liquidity in the market.
The central bank is expected to intervene with daily tenders and via conventional and Islamic instruments, to stabilise the local money market if needed, a local money dealer said.
“Usual tools to absorb excess funds from the system would include money market tenders, repo tenders, range-maturity auctions of both conventional and Islamic, and commodity Murabahah programme money market tenders,” she told Bernama.
BNM maintained the overnight policy rate (OPR) at the prevailing rate of 3.00 per cent recently, saying at the current level of the OPR, the stance of monetary policy is accommodative and supportive of economic activity.
As a result of the country’s Gross Domestic Product growth of 5.6 per cent for the first quarter of 2017, BNM said domestic financial market conditions remained orderly, amid headline inflation rising to 4.3 per cent due to higher fuel prices.
For the week just-ended, BNM intervened daily to flush the system of surplus funds.
The total liquidity surplus expanded to RM37.49 billion in conventional operations against RM30.50 billion last Friday, while Islamic funds declined to RM4.7 billion versus RM7.78 billion previously.
On a week-to-week basis, the benchmark three-month Kuala Lumpur Interbank Offered Rate (KLIBOR) stood at 3.43 per cent.
Meanwhile, the overnight Islamic reference rate stood at 2.96 per cent, while the one-week, two— and three-week rates stood at 3.02 per cent, 3.06 per cent and 3.11 per cent, respectively, throughout the week. — Bernama
