There has been speculation whether Bank Negara Malaysia will cut the Overnight Policy Rate after reducing it by a total of 125bps last year, from 3.0% to 1.75%. However, in an announcement today by the Monetary Policy Committee (MPC), it is confirmed that BNM will maintain the OPR at 1.75%.
In the statement it said the resurgence in Covid-19 cases and the introduction of targeted containment measures had affected the recovery momentum in the fourth quarter of 2020.
“As a result, growth for 2020 is expected to be near the lower end of the earlier forecasted range. For 2021, while near-term growth will be affected by the re-introduction of stricter containment measures, the impact will be less severe than that experienced in 2020, ” it said.
“Given the uncertainties surrounding the pandemic, the stance of monetary policy going forward will be determined by new data and information, and their implications on the overall outlook for inflation and domestic growth. The Bank remains committed to utilise its policy levers as appropriate to create enabling conditions for a sustainable economic recovery, ” it said.
On Monday, Prime Minister Tan Sri Muhyiddin Yassin announced the “Perlindungan Ekonomi dan Rakyat Malaysia (Permai)” assistance package worth RM15bil comprising 22 initiatives to shore up consumer and business sentiment.