KUALA LUMPUR, July 11 — Bank Negara Malaysia (BNM) will likely lower the overnight policy rate (OPR) next year, especially if uncertainties surrounding the trade war between China and the United States continue to escalate, says Bank Islam Malaysia Bhd.
Bank Islam Malaysia Chief Economist Dr Mohd Afzanizam Abdul Rashid said the OPR needs to be lowered if the friction between two of the world’s giant economies begin to negatively affect global growth and subsequently Malaysia’s gross domestic product (GDP) considering the economy’s openness to trade.
“However, we believe there will not be any change to the OPR this year. Changes, if any, will likely only be from 2019 onwards,” he told reporters at Bank Islam’s Hari Raya Aidilfitri celebration here today.
Meanwhile, BNM today announced that the Overnight Policy Rate (OPR) would be maintained at 3.25 per cent and that at the current OPR level, the degree of monetary accommodativeness is consistent with the intended policy stance.
In terms of economic growth, Mohd Afzanizam said Malaysia’s GDP is expected to grow more than five per cent this year.
“Malaysia’s growth trajectory is still good and at the same time, the inflation rate is stable. Therefore, there is no need to lower the OPR at the moment.
“For the ringgit, our projection is biased towards a depreciation to a range of 3.95-4.05 compared with the range of 3.85-3.95 previously, following uncertainties surrounding the trade war,” he added. — Bernama
