OCBC Bank expects BNM to cut OPR to 1.5%

Chief economist Selena Ling

KUALA LUMPUR: OCBC Bank is expecting Bank Negara Malaysia (BNM) to turn more downbeat on the Overnight Policy Rate (OPR), noting a heightened chance of a rate cut of down to 1.5 per cent from the current 1.75 per cent in the upcoming meeting this Wednesday due to recent events.

In its 2021 Economic Outlook, chief economist Selena Ling said depending on how things pan out in the pandemic fight in the weeks thereafter, there might well be another rate cut of down to 1.25 per cent in the next Monetary Policy Committee (MPC) meeting in March.

"With the relatively dim prospect of large-scale fiscal help, the onus is thus for monetary policy to shoulder the burden more considerably. When BNM left its OPR unchanged at 1.75 per cent for the second time running in its last MPC meeting on Nov 3, Bank Negara still sounded quite sanguine on growth prospects.

"We expect that tone to have turned more downbeat by now in the face of recent events, however,” she said.

On the whole, Ling said the bank remains constructive of Malaysia’s economic prospects and the eventual recovery in the later part of 2021.

"This is especially since its manufacturing sector is well-geared to partake in the global electronics recovery, for example, but the immediate months ahead would present some speed bumps," she said. - Bernama

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OPR , OCBC Bank , BNM , rate cut , MPC meeting


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