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FINANCE Minister II Datuk Seri Amir Hamzah has reaffirmed that Bank Negara Malaysia (BNM) will continue to adopt a measured and deliberate approach to its Overnight Policy Rate (OPR) decisions, only making changes when justified by economic conditions.
Speaking at the ASEAN Leadership Forum in Washington, DC, on Friday, Amir described the OPR as “a powerful policy instrument” that should not be used preemptively, especially when there is no immediate need.
“BNM also raised rates, but it raised in measured form along the way, and it hit a fairly accommodative rate of 3 per cent which was comfortable for businesses to be still able to do business, but signalled the right message along the way,” he said during a Q&A session at the event, hosted by the Centre for Strategic and International Studies (CSIS).
Amir noted that Malaysia’s inflationary pressures remain subdued, with headline inflation easing from 1.8 per cent last year to 1.4 per cent in March, underscoring the central bank’s cautious stance.
“The (OPR) rate is at 3 per cent now. There's no pressure for the government at this point in time on that,” he said.
He added that while BNM retains the flexibility to respond to future market uncertainties, any move on interest rates would be based on a clear assessment of the evolving economic landscape.
“Now, if things get difficult, is the tool available to be looked at? It's available to be looked at, but we don't take that preemptive decision today,” he said.
BNM’s next Monetary Policy Committee meeting is scheduled for 8 May 2025, where the central bank will review the current rate setting. - April 26, 2025