00:00 Bank Negara Malaysia is expected to prioritise supporting economic growth rather than protecting
00:07 the ringgit by keeping the overnight policy rate steady at 3% when it concludes its two-day
00:12 monetary policy committee meeting today. The central bank has kept the benchmark OPR at 3%
00:19 since July last year and economists expect the committee to maintain this pause.
00:24 There has been speculation that BNM might hike the OPR to strengthen the ringgit after it dropped
00:30 to 4.80 to the US dollar, its lowest since 1998. Benedict Wirasana, Research Director at Research
00:39 Institute Bait al-Amanah, acknowledged the continuous decline of the ringgit to a new
00:43 all-time low could be seen as a factor pressuring BNM to raise the OPR. However, he added that there
00:51 is no guarantee raising the OPR will strengthen the value of the ringgit as the main reason for
00:56 the ringgit's weakness are external factors in addition to the long-term loss of Malaysia's
01:01 competitiveness. He said the strong likelihood of the US Federal Reserve cutting interest rates in
01:06 the latter half of 2024 due to declining inflation and slowing GDP growth would reduce the interest
01:12 rate differential and discourage investors from selling the ringgit to invest in higher US interest
01:18 rates. Benedict also said that raising the OPR will lead to adverse domestic repercussions,
01:24 including dampening consumption and raising the cost of living, especially for individuals and
01:30 businesses serving loans, further worsening household indebtedness. Meanwhile, Malaysian
01:36 Institute of Economic Research Senior Research Fellow Shankaran Nambiar said BNM's overarching
01:42 priority is to support the country's economic growth rather than protecting the ringgit via
01:47 monetary policy measures such as raising the OPR levels. RHV Bank Acting Group Chief Economist
01:54 Barnabas Gan and Economist Chin-Hee Sian see limited possibility for BNM to cut the OPR
02:01 amid the robust economic outlook and the possible upside risks on inflation momentum.
02:07 BNM might hold its benchmark rate until there is greater clarity over fuel subsidy reform, they say.
02:14 (upbeat music)
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