KUALA LUMPUR, Sept 27 — The overnight policy rate (OPR) is expected to remain at 3 per cent this year, with Malaysia’s producer price index (PPI) inflation moderating to 0.3 per cent year-on-year (y-o-y) in August from 1.3 per cent y-o-y in July.
The PPI measures price changes of goods at the producer level.
MIDF Research said the easing of PPI inflation generally suggests a limited effect from policy changes, such as diesel subsidy rationalisation on local production costs.
“On that note, with inflation still under control, we do not foresee the OPR to be adjusted this year,” it said in a note today.
Citing data released by the Statistics Department yesterday, MIDF Research said the August PPI was the slowest increase in six months.
“The moderation can be explained by lower commodity prices, particularly Brent crude oil, which dropped 7.3 per cent y-o-y to US$78.88 per barrel,” it said.
— Bernama
