BNM maintains OPR at 3%, citing strong economic performance

Bank Negara Malaysia (BNM) has decided to maintain the Overnight Policy Rate (OPR) at 3% following the latest Monetary Policy Committee (MPC) meeting. The decision reflects a positive outlook for both the global and Malaysian economies, with continued growth and moderating inflation.

Globally, economic expansion is supported by resilient labour markets, moderating inflation, and improved global trade. While challenges such as geopolitical tensions and volatile financial markets persist, global growth is expected to benefit from the recovery in electrical and electronics (E&E) and non-E&E sectors.

Malaysia’s economy grew by 5.1% in the first half of 2024, driven by strong domestic demand and increased exports. The country’s position in the semiconductor supply chain and robust non-E&E exports are expected to benefit from the global tech upcycle. Rising tourism, employment growth, and ongoing public and private investment projects are also contributing to the country’s economic resilience. However, downside risks include weaker-than-expected external demand and commodity production.

Inflation averaged 1.8% in the first half of the year, and both headline and core inflation are expected to remain within projected ranges, likely staying below 3%. Mitigation measures have contained the impact of price adjustments on diesel, while the inflation outlook depends on future domestic policies and global commodity prices.

The ringgit’s recent recovery is attributed to lower interest rate expectations in major economies and Malaysia’s strong economic performance. Looking ahead, BNM remains vigilant to domestic and global developments, ensuring its policies continue to support sustainable growth and price stability.