Malaysia: Bank Negara likely to maintain OPR at 1.75%

KUALA LUMPUR: HSBC Global Research expects Bank Negara to keep the Overnight Policy Rate at 1.75% at its third Monetary Policy Committee meeting on Thursday.

In a research note yesterday, its chief economist for Asean, Joseph Incalcaterra, said despite downside risks to Bank Negara’s economic growth forecast, there was a high bar for further monetary policy accommodation.

“Bank Negara can count on manufacturing growth to provide support to the economy and employment.

“The government has also secured enough vaccine doses to enable the country to achieve some form of herd immunity by end-2021, despite supply challenges and signs of vaccine hesitancy in the short term, ” he added.

He pointed out that despite a slow start to vaccinations, Malaysia was one of only a few Asian economies that might reach herd immunity this year.

Incalcaterra said HSBC Global Research expected the upward momentum for export to be sustained after the country recorded a 31% year-on-year increase in March, which was driven by a 47.1% jump in electronics exports. — Bernama