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  • Writer's pictureBait Al-Amanah

FMT Interview: BNM not Under Pressure to Hike OPR, say Economists

In an unexpected decision, Indonesia’s central bank increased its benchmark interest rate by 25 basis points to 6.25% on April 24, aiming to bolster the struggling rupiah. Governor Perry Warjiyo of Bank Indonesia stated that the rate hike was a proactive measure to maintain inflation within its targeted range. Free Malaysia Today interviewed Benedict Weerasena, Research Director of Bait Al Amanah to understand whether the Bank Negara Malaysia (BNM) would follow suit on May 9, 2024.


Bait Al Amanah research director Benedict Weerasena explained that there is no pressure on BNM to raise or lower the OPR, citing three main reasons for his assessment.


“Firstly, the prevailing inflation trajectory does not present a risk to BNM’s targeted inflation rate. Malaysia’s headline inflation and core inflation remained benign at 1.8% and 1.7% respectively in March 2024.


Secondly, the ringgit is likely to strengthen in the second half of 2024, buoyed by structural reforms and positive growth prospects in addition to BNM’s various short-term remedial measures, he said.


Weerasena also expects Malaysia’s economic growth to continue improving in 2024, propelled by export recovery and resilient domestic demand supported by sustained employment and wage growth.


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