OPR Stays At 3%, Says Bank Negara
Bank Negara Malaysia kept the overnight policy rate (OPR) at 3.00% as the country is expected to register higher economic growth and moderating inflation.
The current OPR allows the central bank’s monetary policy to be more accommodative and supportive towards economic activity, said Bank Negara in a statement.
“The Malaysian economy performed better than expected in the first quarter of 2017. Growth was lifted by stronger domestic demand, with additional impetus from exports. Overall, the economy is expected to register higher growth in 2017.
“Headline inflation is expected to moderate in the second half of the year, mainly reflecting the waning effect of global cost factors. Underlying inflation, as measured by core inflation, will be sustained by the more robust domestic demand, but is expected to remain contained,” Bank Negara said.
The domestic financial markets had been resilient while the ringgit was stable, the central bank noted.
The stability of the currency was attributed to a more balanced demand and supply of foreign currencies, following implementation of Malaysia’s financial market development measures.
“Banking system liquidity remains sufficient with financial institutions continuing to operate with strong capital and liquidity buffers. The growth of financing to the private sector has improved, consistent with the pace of economic activity,” Bank Negara added.