The Week Ahead - overnight policy rate takes centre stage


According to a Bloomberg survey, all six economists polled expect Bank Negara to keep its policy rates unchanged at 1.75%.

OPR takes centre stage

BANK Negara’s overnight policy rate (OPR) will take centre stage. The central bank is expected to announce its monetary policy decision on Thursday and its international reserves as at April 30 on Friday.

According to a Bloomberg survey, all six economists polled expect Bank Negara to keep its policy rates unchanged at 1.75%.

CGS-CIMB Research expects OPR to remain on hold at 1.75% in 2021 to support economic recovery, as Bank Negara looks past the transitory surge in cost-push inflation.

UOB Global Economics and Markets Research is also expecting Bank Negara to keep interest rates on hold while continuing to monitor developments of the pandemic and coordinate with the government on a more targeted fiscal approach.

The Statistics Department is expected to release industrial production index (IPI), manufacturing sales and rubber statistics for March 2021 on Thursday.

IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI) is due today. The index rose to 49.9 in March from 47.7 in February.

Policy decisions

THE Reserve Bank of Australia (RBA) and the Bank of Thailand (BoT) are expected to decide on their monetary policies.

All the seven economists polled in a Bloomberg survey expect the RBA to keep both the cash rate target and the three-year yield target at 0.1%.

UOB Global Economics and Markets Research also expects the cash rate to remain unchanged until 2024 but expects a full A$100bil (RM316bil) extension of quantitative easing (QE) beyond the second round.

UOB expects that yield curve control (YCC) may not be extended past the April 2024 bond, with the RBA no longer able to credibly commit to rates staying at 0.1% beyond this point.

Subsequently, the RBA will release its quarterly statement on monetary policy on Friday.

Meanwhile, UOB kept its call for BoT to leave its benchmark rate unchanged at 0.50% for the whole of 2021.

According to a Bloomberg survey, all the six economists polled expect BoT to keep its policy rate unchanged at 0.5%.

Q1 GDP

THE first quarter gross domestic product (GDP) figures are due to be released for Hong Kong and Indonesia.

IHS Markit expects GDP to show the quarterly annualised rates of growth slowing to 2.1% and 1.0% in Hong Kong and Indonesia respectively.

Indonesian vendorIndonesian vendor

UOB estimates Hong Kong’s GDP to expand 3.6% year-on-year and Indonesia’s GDP to grow 2.2% year-on-year.

Bloomberg estimates Hong Kong’s GDP to grow 3.5% year-on-year from a contraction of 3% year-on-year in the last quarter of 2020.

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OPR , Bank Negara , rates , RBA , BoT , UOB , GDP , Indonesia , Hong Kong

   

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