Bank Muamalat Malaysia chief economist Mohd Afzanizam Abdul Rashid.
KUALA LUMPUR: Maintaining the overnight policy rate (OPR) at 2.75% provides better predictability in borrowing costs, allowing Malaysians to plan capital expenditures and asset purchases with confidence, says an economist.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) is expected to maintain the OPR at 2.75% today.
He said the decision would likely be based on the premise that the Malaysian economy continued to grow at a respectable pace in the third quarter of this year, expanding 5.2%, well above the 4.4% growth recorded in the first half of the year.
“Furthermore, the labour market remains in full employment, with the unemployment rate holding steady at 3% for several months. This suggests that more Malaysians are employed and earning steady incomes,” he told Bernama.
Mohd Afzanizam said these factors would support consumer spending, aided by cash transfer programmes such as Sumbangan Tunai Rahmah and Sumbangan Asas Rahmah, which complement the strength of the Malaysian economy.
“More importantly, BNM retains policy space to act should there be any economic shocks in the near future,” he added.
BNM’s MPC is scheduled to announce its OPR decision today.
The most recent change to the OPR was a reduction to 2.75%, announced on July 9.
Previously, the rate had been maintained at 3% since May 3, 2023. — Bernama
