Bank Negara Malaysia (BNM) has announced that it will maintain its key interest rate at 3.00% and keep it unchanged until at least 2026, according to a Reuters poll of economists. This decision comes as Malaysia's consumer price index (CPI) rose by 1.8% in March, which is below BNM's estimate of 2.0%-3.5% for the year. The Malaysian Ringgit has also depreciated by over 3% against the dollar this year. All 30 economists in the poll predicted that Malaysia's central bank would leave its overnight policy rate (OPR) at 3.00% on May 9. The country's GDP is expected to grow by 4.3% this year and 4.6% in 2025, with inflation forecasted to average 2.6% this year and 2.5% next year. Economists do not anticipate any rate cuts by the central bank in the near future. [27d878ce]
Bank Islam Malaysia Bhd has successfully mitigated the impact of the static Overnight Policy Rate (OPR) in 2023, resulting in an improved net income margin (NIM). The bank's NIM showed a sequential improvement from 2.06% in 1Q 2023 to 2.11% in 2Q 2023 and 2.17% in 3Q 2023. This positive trend continued, with a 2.13% NIM in 4Q 2023, leading to an overall NIM of 2.12% for the year. Despite the unchanged OPR in the early months of 2023, which resulted in increased deposit costs and a reduction in NIM in 1Q 2023, Bank Islam efficiently managed the slight dip in NIM by aligning finance costs with the static OPR environment. The bank's net profit for the financial year ended December 31, 2023, improved by 12.5% to RM553.1 million compared to the previous year. Bank Islam aims to align its strategies with the nation's economic and environmental goals, focusing on sectors identified for growth and sustainability. In 2024, the bank will prioritize growth, asset quality, liquidity and funding management, and profitability to lead Malaysia's Islamic banking sector. [6961f21c]
Bank Negara Malaysia's Monetary Policy Committee (MPC) has decided to maintain the Overnight Policy Rate (OPR) at 3.00 percent, despite the potential for rate cuts by the US Federal Reserve next year. The central bank, led by Governor Datuk Nor Shamsiah Mohd Yunus, emphasized that Malaysia's monetary policy is determined by domestic factors and that any external developments will be assessed for their impact on the country's economy. The decision to keep the OPR unchanged is aimed at supporting Malaysia's economic growth and ensuring price stability. The current OPR level is considered supportive of the economy and in line with the assessment of inflation and growth prospects. The central bank also highlighted signs of recovery in the electrical and electronics sector, while acknowledging that global trade remains soft due to a shift in spending from goods to services and ongoing trade restrictions. The growth outlook is subject to downside risks from higher-than-anticipated inflation, geopolitical tensions, and tightening financial market conditions. However, there are upside risks to growth from stronger tourism activity, a recovery in the electrical and electronics sector, and faster implementation of projects. The central bank also mentioned that the inflation outlook is subject to changes in domestic policy on subsidies and price controls, as well as global commodity prices and financial market developments. The bank will continue to manage risks of volatility and provide liquidity to ensure the orderly functioning of the foreign exchange market. [82d3a101]
Economists are divided on Bank Negara Malaysia's (BNM) stance on the overnight policy rate (OPR) going forward. TA Securities and CGS-CIMB predict that the OPR will remain at 3% throughout 2024, citing Malaysia's slow economic recovery and potential risks. BNM projects modest inflation in 2024 but acknowledges that government policies on subsidies and price controls could affect demand conditions. HLIB Research projects modest GDP growth of 3.8% in FY2023 and 4.8% in FY2024.
Malaysia's central bank, Bank Negara Malaysia (BNM), is expected to maintain its Overnight Policy Rate (OPR) even if the US Federal Reserve cuts rates next year. BNM Governor, Datuk Nor Shamsiah Mohd Yunus, stated that Malaysia's monetary policy is determined by domestic factors and the central bank will assess the impact of any external developments on the country's economy. The OPR is currently at 3%, and BNM has indicated that it will remain unchanged unless there are significant changes in economic conditions. The decision to maintain the OPR is aimed at supporting Malaysia's economic growth and ensuring price stability. The US Federal Reserve's decision to cut rates next year is based on its assessment of the US economy and may not directly impact Malaysia's monetary policy. [b115f0ae]