Will BNM intervention keep interbank rates stable next week?

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BNM Intervention Expected to Maintain Stable Interbank Rates Next Week

Short-term interbank rates are anticipated to remain stable in the upcoming week, largely due to the expected ongoing intervention by Bank Negara Malaysia (BNM). The central bank is projected to continue its daily tender operations aimed at absorbing excess funds within the local money market, thereby maintaining equilibrium.
BNM's Proactive Liquidity Management

Throughout the past week, BNM actively engaged in daily interventions to manage surplus liquidity. These operations involved various tender types, including conventional, Qard, repo, range maturity auction, and commodity murabahah programme tenders. These measures were implemented to effectively reduce the excess funds circulating in the financial system.
Reduction in Market Liquidity Surplus

The central bank's recent actions have demonstrably reduced the overall liquidity surplus. As of yesterday, the market's total liquidity surplus stood at RM28.93 billion in the conventional system, complemented by RM6.86 billion in Islamic funds. This signifies a successful absorption of excess funds by BNM through its market operations.
Current Interbank Rate Benchmarks

The current interest rate environment reflects this stability. The Overnight Policy Rate (OPR) remains steady at 3.25 per cent. Correspondingly, the overnight Islamic reference rate is at 3.21 per cent. Shorter-term rates, including the one-, two-, and three-week rates, are positioned at 3.28 per cent, 3.32 per cent, and 3.36 per cent respectively. The benchmark three-month interbank rate is currently 3.74 per cent.

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Will BNM intervention keep interbank rates stable next week?

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