• BNM maintains OPR at 1.75%
• Expect Malaysia’s economy to recover in 2H20
• OPR to stay on hold

Bank Negara Malaysia’s Monetary Policy Committee (MPC) decided to maintain the overnight policy rate (OPR) at 1.75%, with the central bank citing the continued improvement in the global economy given the easing of containment measures across more economies and strong policy support.

BNM has slashed the OPR four consecutive times since the start of the year, starting with the two 25bps cuts during the January and March meetings, followed by a 50bps cut in May and another 25bps cut in July.

In its July statement, BNM noted that global economic conditions remained weak with global growth projected to be negative for the year. In its latest Monetary Policy Statement, the bank said the reopening of production facilities led to a resumption of manufacturing and trade activity, although the recovery in the services sector has been slower.

Source: BIMB Securities Research - 11 Sept 2020