KUALA LUMPUR, Feb 12 — Bank Negara Malaysia (BNM) today said there is ample room to adjust the overnight policy rate (OPR) to accommodate the challenges in the economy.
“We have ample room to cut the benchmark rate due to the low inflation rate in the country,” its Governor, Datuk Nor Shamsiah Mohd Yunus said at a press conference, here.
Malaysia’s economy expanded by 3.6 per cent in the fourth quarter (Q4) of 2019, the lowest since the 2009 financial crisis amid supply disruptions in the commodity sector during the quarter.
The lower growth rate dragged the full-year Gross Domestic Product (GDP) growth to 4.3 per cent, the lowest of BNM’s forecast of between 4.3 and 4.8 per cent for last year.
Just last month, BNM decided to cut the OPR by 25 basis points to 2.75 per cent, which is the lowest in nine years. It was last trimmed to three per cent from 3.25 per cent in May last year.
In a statement to announce the OPR cut, BNM’s Monetary Policy Committee (MPC) said it was acting pre-emptively to secure the country’s improving growth trajectory amid price stability and to counter downside risks arising both domestically and abroad.
The MPC meets six times in a year and the next meeting is scheduled to take place on March 3, 2020.
Earlier in the briefing, Nor Shamsiah said Malaysia’s headline inflation was lower at 1.0 per cent for Q4 2019, bringing the overall 2019 inflation rate to 0.7 per cent.
Headline inflation for 2020 was projected to average higher but remain modest, depending on the global crude oil and commodities prices, as well as the timing to lift domestic fuel ceiling, she added. — Bernama
