BNM Expected to Hold OPR at 3.0% in Next Meeting

Experts’ Expectation

Bank Negara Malaysia (BNM) is expected to keep the overnight policy rate (OPR) at 3.0 per cent during its meeting on January 22, 2025, according to BMI, a Fitch Solutions company.

Inflation Remains Benign

In a note, BMI said inflation, which is still benign, and a robust growth outlook suggest that BNM can afford to leave the OPR at its current level for a prolonged period.

Headline Inflation

“In line with our expectations, headline inflation edged lower to 1.8 per cent year-on-year (y-o-y) in November from 1.9 per cent in October,” it said.

Core Inflation

“Moreover, both headline and core inflation averaged at 1.8 per cent in the first eleven months of 2024 – comfortably below Malaysia’s 10-year average of 2.0 per cent, indicating that inflation is still benign enough for the bank to hold the OPR,” it said.

Robust Growth Outlook

At the same time, BMI forecasted that the central bank will hold the OPR at the current 3.0 per cent for the rest of the year on the back of a resilient growth outlook.

Economic Growth

“The central bank has less to worry about on the economic front,” BMI said. “Since its previous update, the bank’s confidence in the economy remains intact, citing ongoing investment projects which will boost exports and expand the productive capacity of the economy,” it added.

Conclusion

In conclusion, BMI expects BNM to hold the OPR at 3.0 per cent in the next meeting, citing benign inflation and a robust growth outlook.

Frequently Asked Questions

Q: Why is BMI expecting BNM to hold the OPR at 3.0 per cent?
A: BMI expects BNM to hold the OPR at 3.0 per cent due to benign inflation and a robust growth outlook.

Q: What is the current OPR rate?
A: The current OPR rate is 3.0 per cent.

Q: When is the next BNM meeting?
A: The next BNM meeting is on January 22, 2025.

Q: What is BMI’s forecast for 2024 and 2025 growth rates?
A: BMI forecasts 5.0 per cent and 4.7 per cent for 2024 and 2025, respectively.