KUALA LUMPUR: Bank Negara Malaysia decided to maintain the overnight policy rate (OPR) at 3.25% during its Monetary Policy Committee (MPC) meeting here the other day.
“At the current level of the OPR, the stance of monetary policy remains accommodative and supportive of economic activity,” it said.
BNM said the MPC recognises that there are heightened risks in the global economic and financial environment.
“These risks are being carefully monitored to assess their implications on macroeconomic stability and the prospects of the Malaysian economy. This is to ensure that the monetary policy stance is consistent with the sustainability of the overall growth prospects,” it said.
However, it cautioned that going forward, “downside risks to growth, however, have risen amid greater uncertainty on both the global and domestic fronts”.
BNM pointed out that of significance, Malaysia is entering this challenging period from a position of strength given the diversified sources of growth of the economy, low unemployment level, manageable level of external indebtedness, and a well-capitalised banking system.
“The assessment is therefore for the economic growth to remain within the region of 4.5% to 5.5%,” it said.
On the ringgit, it said the ringgit exchange rate is being affected by global factors that are affecting many emerging and commodity producing economies.
These factors include the weaker commodity prices, the strength of the U.S. dollar, and the uncertainty in the global financial markets.
“The ringgit exchange rate will reflect the underlying fundamentals of the economy when the external and domestic uncertainties recede,” it said.
BNM said it would continue to ensure the orderly functioning of the money and foreign exchange markets.
