As expected, Bank Negara Malaysia (BNM) left the overnight policy rate (OPR) unchanged at 3.25% during the latest Monetary Policy Meeting (MPC) with a more “cautious” tone. The central bank acknowledged that “downside risks from unresolved trade tensions, heightened uncertainties in the global and domestic environment, and prolonged weakness in the commodity-related sectors could further weigh on the domestic growth though the baseline forecast appears to remain on a steady growth path”.

With BNM having acknowledged the downside risks in the economic and financial environment, and the need to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation, it supports our view for a rate cut to most likely take place during the July 9 MPC meeting rather than the May 7 MPC meeting by 25bps after taking into account of some recent anecdotal evidences of the macro figures that revealed a weak trend.

• As expected, Bank Negara Malaysia (BNM) left the overnight policy rate (OPR) unchanged at 3.25% during the latest Monetary Policy Meeting (MPC). However, the tone of BNM appears to be “cautious”. The central bank acknowledged that “downside risks from unresolved trade tensions, heightened uncertainties in the global and domestic environment, and prolonged weakness in the commodity-related sectors could further weigh on the domestic growth though the baseline forecast appears to remain on a steady growth path”.

• With BNM having acknowledged the downside risks in the economic and financial environment, and the need to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation, it supports our view for a rate cut to most likely take place during the July 9 MPC meeting rather than to the May 7 MPC meeting by 25bps after taking into account of some recent anecdotal evidences of the macro figures that revealed a weak trend.

Source: AmInvest Research - 6 Mar 2019