KUALA LUMPUR (July 4): Bank Negara Malaysia (BNM) is expected to raise its key overnight rate (OPR) by 25 basis points (bps) to 2.25% at the fourth monetary policy meeting (MPC) of the year expected this week, according to Moody’s Analytics.
In its Monday (July 4th) report, the research firm also noted that the country’s central bank raised the rate in May, lifting it from the record low it had languished in nearly two years.
The two-day BNM MPC meeting is scheduled to begin on Tuesday.
Meanwhile, MIDF Research said BNM “will consider another 25 basis point rate hike” following the continued rise in core inflation, reflecting strong underlying domestic demand.
“Furthermore, the positive dynamics of distributive trade sales, a drop in the unemployment rate to a new pandemic low of 3.9% in April 2022 and a double-digit expansion rate of foreign trade provide positive signals for a strong recovery in the economy,” he added. added in a note on Monday.
At its third MPC meeting in May, the central bank raised the OPR by 25 basis points to 2%. The ceiling and floor rates of the OPR corridor have been increased accordingly to 2.25% and 1.75% respectively.
He said the sustained reopening of the global economy and improving labor market conditions continued to support the recovery in economic activity.