Will Bank Negara Malaysia keep its overnight policy rate (OPR) at 2.75 per cent at its next monetary policy meeting this Thursday?

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Bank Negara Malaysia Expected to Maintain Overnight Policy Rate at 2.75 Per Cent

Moody's Analytics anticipates that Bank Negara Malaysia (BNM) will hold its overnight policy rate (OPR) steady at 2.75 per cent during its upcoming monetary policy meeting this Thursday. This projection follows BNM's previous decision in July to reduce the OPR by 25 basis points, a move enacted as a precautionary measure amid escalating global uncertainties. The central bank's last adjustment saw the ceiling and floor rates of the OPR corridor revised to 3.00 per cent and 2.50 per cent, respectively, on July 9.
OPR Maintained at 2.75 Per Cent Projection

The prevailing forecast from Moody's Analytics suggests that the OPR will remain at its current level of 2.75 per cent. This rate was last maintained in March 2023, prior to an increase to 3.00 per cent in May of the same year.
July Rate Cut as Pre-emptive Measure

In July, BNM implemented a 25 basis points reduction in the OPR. This action was characterised as a pre-emptive strategy to address the growing unpredictability of the external economic landscape.
Corridor Rates Adjusted Following July Cut

Consequent to the July rate cut, BNM announced on July 9 that the upper and lower bounds of the OPR corridor were adjusted. The ceiling rate was reduced to 3.00 per cent, and the floor rate was correspondingly lowered to 2.50 per cent.
Factors Influencing Future Monetary Policy

Moody's Analytics noted that recent industrial production and export figures have exceeded expectations. Furthermore, a potential interest rate cut by the US Federal Reserve in September, coupled with subdued overall inflation, could provide BNM with the flexibility to ease monetary policy should the international economic situation worsen.

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Will Bank Negara Malaysia keep its overnight policy rate (OPR) at 2.75 per cent at its next monetary policy meeting this Thursday?

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