The Times Australia
News From Asia

.

Bank Negara Malaysia (BNM) will likely increase the overnight policy interest rate (OPR) to 3.25%

KUALA LUMPUR, MALAYSIA - Media OutReach - 4 July 2023 - The Monetary Policy Committee of the Bank Negara Malaysia (BNM) will meet on 5–6 July to make a decision on monetary policy.

OctaFX experts anticipate a 25 basis points increase in the interest rate, bringing it to 3.25%. This article delves into the factors influencing this decision and the potential impact on the Malaysian ringgit.

OctaFX.jpg

The Monetary Policy Committee of the Bank Negara Malaysia (BNM) will meet on 5–6 July to make a decision on monetary policy. BNM is expected to increase the interest rate by 25 basis points to 3.25%

At the most recent meeting, the Monetary Policy Committee (MPC) of Bank Negara Malaysia decided to increase the Overnight Policy Rate (OPR) by 25 basis points to 3.00 percent, citing the continuing expansion of Malaysia's economic activity in the first quarter of 2023 after a strong performance in 2022. The economy continues to be driven by resilient domestic demand supported by strong labour market conditions and a stronger-than-expected rebound of China's economy.

The Monetary Policy Committee noted that core inflation has been on a downward trend in recent months due to the moderating influence of cost factors. However, it anticipates that core inflation will remain high due to sustained demand. Therefore, the committee's last monetary policy statement indicated the need for further normalisation of monetary accommodation, citing solid domestic growth as a key factor.

According to the latest monthly highlights and statistics, headline inflation in Malaysia continued to decline, reaching 2.8% in May. This decrease was mainly due to non-core CPI components, notably lower inflation in fuel (-0.2 percentage points) and fresh food (-0.1 percentage points). Core inflation also declined slightly to 3.5% (from April’s 3.6%), primarily influenced by lower inflation in communication services.

External factors influenced domestic financial markets, with investors adopting a risk-off approach due to concerns over a potential US Federal Reserve rate hike and a slower-than-expected recovery in China. As a result, the ringgit depreciated by 3.4% against the US dollar.

The renewed hawkish rhetoric from the US Federal Reserve further sets the stage for the weakening of the ringgit. The current US interest rate is 5.25% compared to 3% in Malaysia, and investors believe the gap will widen. When the US offers higher yields, foreign entities tend to convert their Malaysian assets into US dollars and divert their investments to the US market. If Bank Negara Malaysia leaves the rate unchanged, it is expected to accelerate the weakening of the ringgit, which could reach a multi-year high of 4.75 quickly.

However, considering the resilient state of the economy, Bank Negara Malaysia is likely to raise the overnight policy rate (OPR) by 25 basis points to 3.25% at the end of the two-day meeting. This move aims to support capital markets and stabilise the USDMYR exchange rate, which is anticipated to trend lower (with ringgit appreciating) with a target range of 4.50 to 4.57 amid a decreasing interest rate differential between Malaysia and the US Federal Reserve.


Hashtag: #BNM #interestrate #MYR #USD

The issuer is solely responsible for the content of this announcement.

About OctaFX

is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services already utilised by clients from 180 countries who have opened more than 21 million trading accounts. Free educational webinars, articles, and analytical tools they provide help clients reach their investment goals.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

In the APAC region, OctaFX managed to capture the ‘Best Forex Broker Malaysia 2022’ award and the ‘Best Global Broker Asia 2022’ from Global Banking and Finance Review and International Business Magazine, respectively.

Times Magazine

Building a Strong Online Presence with Katoomba Web Design

Katoomba web design is more than just creating a website that looks good—it’s about building an online presence that reflects your brand, engages your audience, and drives results. For local businesses in the Blue Mountains, a well-designed website a...

September Sunset Polo

International Polo Tour To Bridge Historic Sport, Life-Changing Philanthropy, and Breath-Taking Beauty On Saturday, September 6th, history will be made as the International Polo Tour (IPT), a sports leader headquartered here in South Florida...

5 Ways Microsoft Fabric Simplifies Your Data Analytics Workflow

In today's data-driven world, businesses are constantly seeking ways to streamline their data analytics processes. The sheer volume and complexity of data can be overwhelming, often leading to bottlenecks and inefficiencies. Enter the innovative da...

7 Questions to Ask Before You Sign IT Support Companies in Sydney

Choosing an IT partner can feel like buying an insurance policy you hope you never need. The right choice keeps your team productive, your data safe, and your budget predictable. The wrong choice shows up as slow tickets, surprise bills, and risky sh...

Choosing the Right Legal Aid Lawyer in Sutherland Shire: Key Considerations

Legal aid services play an essential role in ensuring access to justice for all. For people in the Sutherland Shire who may not have the financial means to pay for private legal assistance, legal aid ensures that everyone has access to representa...

Watercolor vs. Oil vs. Digital: Which Medium Fits Your Pet's Personality?

When it comes to immortalizing your pet’s unique personality in art, choosing the right medium is essential. Each artistic medium, whether watercolor, oil, or digital, has distinct qualities that can bring out the spirit of your furry friend in dif...

The Times Features

How much money do you need to be happy? Here’s what the research says

Over the next decade, Elon Musk could become the world’s first trillionaire[1]. The Tesla board recently proposed a US$1 trillion (A$1.5 trillion) compensation plan, if Musk ca...

NSW has a new fashion sector strategy – but a sustainable industry needs a federally legislated response

The New South Wales government recently announced the launch of the NSW Fashion Sector Strategy, 2025–28[1]. The strategy, developed in partnership with the Australian Fashion ...

From Garden to Gift: Why Roses Make the Perfect Present

Think back to the last time you gave or received flowers. Chances are, roses were part of the bunch, or maybe they were the whole bunch.   Roses tend to leave an impression. Even ...

Do I have insomnia? 5 reasons why you might not

Even a single night of sleep trouble can feel distressing and lonely. You toss and turn, stare at the ceiling, and wonder how you’ll cope tomorrow. No wonder many people star...

Wedding Photography Trends You Need to Know (Before You Regret Your Album)

Your wedding album should be a timeless keepsake, not something you cringe at years later. Trends may come and go, but choosing the right wedding photography approach ensures your ...

Can you say no to your doctor using an AI scribe?

Doctors’ offices were once private. But increasingly, artificial intelligence (AI) scribes (also known as digital scribes) are listening in. These tools can record and trans...