‘We believe BNM will decrease the rate by 25 basis points on July 8,’ says an OCBC Bank economist. (The Edge/Zahid Izzani Mohd Said photo)
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KUALA LUMPUR, Malaysia (July 2): The possibility of Bank Negara Malaysia (BNM) lowering its overnight policy rate (OPR) by 25 basis points (bps) at its next Monetary Policy Committee (MPC) meeting on July 8 has grown, according to OCBC Bank.
The MPC could still present a positive view in May, according to its economist Wellian Wiranto, because business activity were mostly unaffected by the shutdown at the time.
“That assumption is tragically becoming less tenable by the day, as one more set of restrictions is stacked on top of already tightened regulations.
In a research note released today, he added, “Overall, we expect an increased possibility for BNM to decrease the rate by 25bps on July 8.”
The implementation of the enhanced mobility control order (EMCO) in specified regions of Selangor and Kuala Lumpur from July 3 to 16, 2021, according to Wiranto, indicates that the country may have to wait a while longer for restrictions to be eased.
He stated that resuming economic operations by mid-July would be unlikely at this time.
“In the meanwhile, even if the current stimulus helps in certain respects, the economic blows may be felt more severely,” he warned./n
