KUALA SELANGOR (Sept 17): The Government does not intervene in decisions on the overnight policy rate (OPR) as it is determined by Bank Negara Malaysia’s (BNM) Monetary Policy Committee, said Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

The finance minister said the OPR comes under the Central Bank of Malaysia Act 2009, and the Government does not interfere in BNM's affairs.

"Many say the Government prioritises the banks [by increasing the OPR], but this is not decided by the Government, and neither does the Government interfere in this matter. This perspective should be corrected.

"OPR increases also do not enrich the banks because they also have to pay higher interest rates to depositors," he told reporters after officiating the Ministry of Entrepreneur Development and Cooperatives’ 2022 Entrepreneurs and Cooperatives Tour Programme here on Saturday (Sept 17).

Tengku Zafrul said the country's OPR is now at 2.50% after BNM raised it by a total of 75 basis points since January. The OPR stood at 3% before the Covid-19 pandemic.

"It is necessary to compare with other countries’ bank rates, some of which have been raised by more than 225 basis points, but we are still at the 2.50% level. Is this high when compared to the 6.9% growth in the first half of the year, and the second-quarter growth of 8.9%?

"The country's OPR before the Covid-19 pandemic was at least 3% since 2013. So, it is still low and the monetary policy is still accommodative," he said.

The finance minister also said he is confident that the Malaysian economy will be able to achieve the official 2022 gross domestic product growth projection of between 5.3% and 6.3%.

https://www.theedgemarkets.com/article/govt-does-not-interfere-opr-decisions-says-zafrul