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Malaysia – BNM may raise OPR by 25 bps to 3.25 pct on Thursday: Bloomberg
KUALA LUMPUR, Jan 24: Bank Negara Malaysia (BNM) may raise its overnight policy rate (OPR) by 25 basis points (bps) to 3.25 per cent on Thursday, in a move to anchor inflation expectations, said Bloomberg economist, Tamara Mast Henderson.
In a statement, she said Bloomberg Economics’ view was in line with the median forecast in a Bloomberg survey, and even so, market uncertainty around the meeting appears to be high.
“The survey showed analysts are sharply divided on the outcome, with many seeing the central bank unable to act ahead of the general elections which is due by August, but yet to be called,” she added.
Henderson said Malaysia’s growth in 2017 was strong at about 5.8 per cent according to Bloomberg consensus estimates, compared with 4.2 per cent in 2016, while inflation nearly doubled to 3.9 per cent year on year from January- November from two per cent in 2016.
The outlook for 2018 remains relatively robust she said, with household spending supported by new government measures to boost income and spending power.
“For this oil-producing country, the sharp increase in oil prices should support export growth through at least the first half, if not longer. It also spells higher demand-pull, in addition to cost-push, price pressures,” she added.
On the other note, Henderson said BNM had warned of a tighter monetary policy ahead.
“Even so, the outlook for 2018 has its challenges. The approach of elections and higher global bond yields may restrain investment.
“Reforms and lower growth potential in China may dampen oil prices and export volumes. The impact of tax cuts and other Malaysian government handouts will fade without new measures for next year and this suggests any tightening would be limited in scope,” she added.– Bernama
Source: http://www.themalaysiantimes.com.my/bnm-may-raise-opr-25-bps-3-25-pct-thursday-bloomberg/