KUALA LUMPUR: Kenanga Research maintained its view that Bank Negara Malaysia would hold the overnight policy rate (OPR) at 3.25% for 2018 on the back of the central bank's statements following the fifth Monetary Policy Committee meeting yesterday.
"Supporting growth and price stability would still be BNM’s focus and priority in spite of further capital outflows in August amid the emerging market rout caused by spill overs from financial turmoil in Turkey and Argentina, as well an impending US Fed rate hikes.
"Apart from assuring that its monetary operations would continue to provide sufficient liquidity BNM has recently (17 August) relaxed its FX administration rules to help support businesses manage administrative and compliance cost," it said.
BNM had maintained the OPR at 3.25% and the statutory reserve requirement rate unchanged. at its MPC meeting yesterday.
Meanwhile, Kenanga noted that the MPC's view on the Malaysian economy had shifted to slightly more "sanguine" from a more possimistic outlook in the previous meeting in July.
"Nonetheless, BNM continue to remain cautious on both fronts as it stated that 'the economy faces downside risks stemming from heightened trade tensions, prolonged weakness in the mining and agriculture sectors and some domestic policy uncertainty'."
THe next monetary policy meeting will be held on Nov 8.
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