CURRENT OPR SETTING CONSISTENT WITH ECONOMIC GROWTH - MIDF AMANAH

KUALA LUMPUR, May 8 (Bernama) -- MIDF Amanah Investment Bank Bhd expects the overnight policy rate (OPR) to remain at 3 per cent for the rest of the year, as this level aligns with current assessments of economic growth and inflation.

It said that while the broader economy is expected to continue expanding, inflation could increase due to supply-side pressures, such as policy adjustments and rising costs. 

“Nevertheless, with demand pressures remaining under control, we do not foresee this higher inflation prompting a change in the OPR setting. We believe that the overall inflation will remain contained.

“On the other hand, Bank Negara Malaysia (BNM) has the necessary policy flexibility to respond to future economic uncertainties, particularly to counter downside risks from domestic economic slowdown and changes in the inflation outlook,” MIDF Amanah said in its Economic Review note today. 

At the Monetary Policy Committee meeting today, BNM decided to maintain the OPR at 3 per cent, unchanged for 12 consecutive meetings since May 2023.

MIDF Amanah highlighted that a more pronounced softening in the growth momentum could prompt BNM to shift to policy easing to support the economy. 

However, it does not see any urgent need for BNM to ease the monetary policy as growth continued to be supported by growing domestic economic activities.

Meanwhile, in a note today, CIMB Investment Bank Bhd said it expects BNM to cut the OPR by 25 basis points (bps) to 2.75 per cent in July.

It said that by then, there would be greater clarity on second quarter 2025 economic activity and US-Malaysia tariff negotiations, providing policymakers with an opportunity to reassess the growth and inflation outlook.

-- BERNAMA