Prime Minister Ismail Sabri should dissolve the Jihad on Inflation Special Cabinet Committee headed by Annuar Musa for being ineffective, incompetent and irrelevant to stem rising prices. This follows Bank Negara Malaysia’s(BNM) decision to hike up its overnight policy rate(OPR) for the third time in the row this year by 25 basis points from 2.25 % to 2.5 %, principally to stem inflation.
BNM said the high inflationary pressures are due to elevated commodity prices and tight labour markets, despite continued easing in global supply chain conditions. BNM also indicated that the hike in OPR would not arrest the decline of a rapidly depreciating ringgit that dropped to its lowest since January 1998 at 4.505, which is affected by the US Federal Reserve’s aggressive interest rate hikes on a scale much larger than Malaysia can sustain.
Inflation is seen by BNM as still sufficiently serious enough to warrant hiking up the OPR despite the inherent risks in sacrificing economic growth and COVID-19 recovery efforts for the second-half of the year and increasing borrowing costs for individuals and businesses. Hiking up the OPR is no different from comprehensively repudiating the Chairman of the Jihad On Inflation Special Cabinet Committee Annuar Musa’s claims that inflation and soaring food prices is slowly under control, as baseless and mere political sloganeering.
BNM has indirectly dismissed Annuar Musa’s anti-inflation efforts as of no consequence with the consumer price index rising by 4.4% in July compared to 3.4% in June 2022, the month that Annuar was first appointed as Chairman. Since BNM is now relying on the monetary tool of raising interest rate to fight inflation there is no need nor necessity to retain a Jihad On Inflation Special Cabinet Committee.
Such a special Cabinet Committee will only have a role to play if it is chaired by the Prime Minister himself. DAP urges Malaysians affected by the 0.75% hike in OPR this year from 1.75% to 2.5% to state how much more they are paying for their loans each month.