Bank Negara Malaysia Cuts Overnight Policy Rate to Support Economic Growth

Bank Negara Malaysia took a proactive step to support the country's economic growth by cutting the Overnight Policy Rate (OPR) by 25 basis points to 2.75 per cent. This decision aims to preserve a steady growth path despite external uncertainties that could impact Malaysia's economy. The central bank emphasized that the domestic economy remains strong, with resilient domestic demand, sustained investment activity, and steady household spending expected to continue driving growth in the coming quarters.

Key Takeaways:

• The Overnight Policy Rate (OPR) was cut by 25 basis points to 2.75 per cent to support economic growth.
• The ceiling and floor rates of the OPR corridor were adjusted to 3.00 per cent and 2.50 per cent respectively.
• Bank Negara Malaysia noted that the domestic economy remains on a strong footing, driven by resilient domestic demand, sustained investment activity, and steady household spending.
• The central bank emphasized that inflation remains moderate, averaging 1.4 per cent for headline and 1.9 per cent for core between January and May.
• Risks to the growth outlook are tilted to the downside, driven by softer global trade, weaker sentiment, and lower commodity output.
• The ringgit's performance will be shaped largely by external developments despite ongoing domestic structural reforms.
• The Monetary Policy Committee (MPC) will continue to assess risks to growth and inflation, staying vigilant as the economy evolves.

Statistics:

• The OPR was cut by 25 basis points to 2.75 per cent.
• The ceiling rate of the OPR corridor is now 3.00 per cent.
• The floor rate of the OPR corridor is now 2.50 per cent.
• Inflation averaged 1.4 per cent for headline and 1.9 per cent for core between January and May.
• Risks to the growth outlook are tilted to the downside due to external factors.

Sources:

• Bank Negara Malaysia (No date given)
• Malay Mail (No date given)