Bank Negara To Maintain Opr At 3pct According To Standard Chartered
STANDARD Chartered Global Research expects Bank Negara Malaysia (BNM) to keep the overnight policy rate (OPR) unchanged at 3 per cent. KUALA LUMPUR: STANDARD Chartered Global Research expects Bank Negara Malaysia (BNM) to keep the overnight policy rate (OPR) unchanged at 3 per cent.
The central bank will announce its monetary policy decision on January 22.
"With robust growth and manageable inflation, a status-quo decision would not be surprising. While fourth quarter (Q4) gross domestic product (GDP) growth slowed, it still remained decent at 4.8 per cent year-on-year (YoY)," it said in a note.
According to Standard Chartered, BNM's focus will be on the central bank's characterisation of the recent ringgit performance.
The firm said the ringgit outperformed regional foreign exchange (FX) through the first nine months of 2024.
"BNM's assessment of the ringgit evolved towards becoming more comfortable—from 'undervalued" in March to 'does not reflect ... fundamentals" in May to simply noting that it is driven by external factors in July through November," it noted.
Standard Chartered also said the ringgit has depreciated 8.3 per cent against the US dollar since the end of September and is the underperformer (ex-KRW) in the region.
Economic Minister Rafizi Ramli recently noted that the ringgit is undervalued, while BNM Governor Abdul Rasheed Ghaffour mentioned that the central bank is ready to use policy levers to manage the risk of excessive volatility in the FX market.
"We expect rhetoric on FX to turn hawkish, with BNM likely reiterating its engagement with stakeholders to support the ringgit.
"However, the central bank may not go as far as to say that the ringgit is undervalued, given that as of Jan 7, the ringgit nominal effective exchange rate (NEER) was about 3.8 per cent above its 10-year average," it noted. - NST
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