DAP welcomes the decision by Bank Negara Malaysia (BNM) to maintain its overnight policy rate(OPR) at 2.75 % yesterday. This is welcome news to Malaysia’s economy in the face of an expected slowdown in global growth and moderation of inflationary pressures, both locally and internationally.
Economic growth in Malaysia will soften from 8.7% last year to 4.5% this year, whilst inflation was expected to average between 2.8-3.8 % this year compared with 3.3% last year. Malaysia’s consumer price index (CPI) in January this year rose 3.7% from a year earlier, versus a 3.8% in December 2022.
There is therefore no urgency by BNM to increase the OPR, as done last year, when BNM increased OPR by a total of 100 basis points from a historic low of 1.75 % as it sought to tame inflation amid robust growth. In January this year, BNM surprised many by not increasing the OPR, easing the cost burden of higher interest rates on individual and SMEs borrowers.
With BNM not increasing OPR again this month, DAP hopes that BNM can demonstrate its heart for the B40 and M40 groups, and SMEs by not increasing OPR for the rest of the year.