PETALING JAYA: Standard Chartered Global Research anticipates Bank Negara Malaysia (BNM) to maintain the Overnight Policy Rate (OPR) at 1.75% in Thursday’s monetary policy committee meeting.
It noted that the central bank has delivered a cumulative 125 basis points (bps) cuts in the last four meetings, taking the key policy rate below the low of 2% set during the global financial crisis (GFC).
The research house explained that it expects Bank Negara to pause and take stock on the back of first, the reopening of the global economy including Malaysia and the clear pick-up in activity by the higher frequency data.
“Second, economic data projections remain uncertain due to lockdown disruptions. Third, BNM has already cut rates to a historical low. Lastly, with some pandemic restrictions still in place, further rate cuts may have only a limited marginal impact and reduce future policy space,” it said in a report yesterday.
With that Standard Chartered believes the central bank has room to adopt a wait-and-see stance. It stated that should a recurrence of infections threaten the recent recovery in activity (global or local) or if the implementation of fiscal measures is weak, Bank Negara could cut policy rates further.
