KUALA LUMPUR: The current 3% overnight policy rate (OPR) set by Bank Negara remains conducive for supporting the nation's economic growth, says Datuk Seri Ahmad Maslan (pic).
The Deputy Works Minister stated that any changes to the OPR would be based on economic and inflation considerations.
"BNM will continue to base its decision on the OPR on Malaysia's domestic situation, including economic prospects and inflationary developments.
"For instance, when the US Federal Reserve recently increased its rate by 50 basis points, BNM did not follow and maintained the OPR at its current 3%," he explained in response to a question by Chong Zhemin (PH-Kampar) on behalf of the Finance Ministry in Dewan Rakyat on Wednesday (Oct 16).
Chong inquired whether Bank Negara would move in direct alignment with the US Federal Reserve and the Bank of England, which had recently adjusted their rates.
Last month, the US Federal Reserve cut rates by half a percentage point, or 50 basis points, while the UK cut rates by 25 basis points to 5% in August.
Ahmad emphasised that Bank Negara would rely on domestic economic circumstances when deciding on the OPR, rather than taking cues from the monetary authorities of other countries.
"Our economy is at an encouraging level while inflationary pressure is under control. The current OPR is at a conducive level to support economic growth," he added.
Regarding the ringgit, Ahmad noted that positive economic indicators and sound government policies have strengthened the nation's currency.
He mentioned the low unemployment rate of 3.2% in August and an inflation rate of 1.9%, compared to 2% in the previous three months, as factors contributing to the strengthening of the ringgit.
This strength, he added, is supported by an increase in approved investment projects, higher industrial output, and sound monetary policies.
