Due to several positive factors domestically and globally, Bank Negara Malaysia has decided to keep the overnight policy rate (OPR) unchanged at three percent, reported The Star.
Bank Negara Malaysia’s Monetary Policy Committee (MPC) made this decision during its latest meeting on Thursday (13 July), as the current OPR rate encourages economic activity.
“At the current level of the OPR, the stance of monetary policy is accommodative and supportive of economic activity. The MPC will continue to assess the balance of risks surrounding the outlook for domestic growth and inflation,” it said.
Besides the local financial sector being resilient, the central bank also noted that the ringgit has remained steady thanks to a more balanced supply and demand for foreign currencies, after it introduced two measures on financial market development.
“Banking system liquidity remains sufficient with financial institutions continuing to operate with strong capital and liquidity buffers,” it noted, adding that funds flowing to the private sector has increased at a pace consistent with the prevailing economic activity.
The central bank also pointed out that the gross domestic product (GDP) grew in Q1 2017 at a rate surpassing initial projections on the back of stronger local demand and better exports.
“Going forward, the more favourable global growth prospects will lead to sustained export performance and generate positive spill-overs to the domestic economy,” said Bank Negara Malaysia.
“Private consumption will be underpinned by higher wages and employment. The improved investment outlook is being driven by new and ongoing infrastructure projects, and stronger capacity expansion in the manufacturing and services sectors. Overall, the economy is expected to register higher growth in 2017.”
Image sourced from The Star
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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