KUALA LUMPUR, April 26 — Finance Minister II Datuk Seri Amir Hamzah Azizan said Bank Negara Malaysia (BNM) takes a measured approach in managing the Overnight Policy Rate (OPR), describing it as a powerful policy instrument that should be used only when circumstances warrant it.
Speaking at the Asean Leadership Forum in Washington, D.C. on Friday, he said that following the historically low OPR of 1.75 per cent during the Covid-19 pandemic, Malaysia’s central bank has adopted a measured and gradual approach to rate hikes compared to other nations that responded with aggressive increases to deal with inflation.
“BNM also raised rates, but it raised in measured form along the way, and it hit a fairly accommodative rate of 3 per cent, which was comfortable for businesses to be still able to do business, but signalled the right message along the way,” he said.
Amir was responding to a query about BNM’s decision to keep the rate at 3.0 percent and Malaysia’s contingency frameworks in case of more uncertainties and market volatility in the future.
He noted that headline inflation, which hit 1.8 per cent last year, has eased to 1.4 per cent in March this year, indicating that inflation is under control.
“The (OPR) rate is at 3 per cent now. There is no pressure for the government at this point in time on that
“Now, if things get difficult, is the tool available to be looked at? It is available to be looked at, but we do not take that preemptive decision today,” Amir said during a question-and-answer session at the forum organised by the Centre for Strategic and International Studies.
The third Monetary Policy Committee meeting of BNM is scheduled for May 8, during which a decision on the OPR will be made.
— Bernama
