BNM likely to keep OPR at 3% this Thursday, says StanChart

BNM likely to keep OPR at 3% this Thursday, says StanChart

StanChart Singapore says it will monitor changes in BNM’s assessment of the ringgit.

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StanChart Singapore said it would watch for any tweaks to BNM’s inflation outlook, following the implementation of diesel subsidy rationalisation on June 10.
PETALING JAYA:
Bank Negara Malaysia (BNM) is likely to keep the overnight policy rate (OPR) unchanged at 3% at its upcoming monetary policy meeting on July 11 despite the recent implementation of diesel subsidy rationalisation, said Standard Chartered Bank (Singapore) Ltd (StanChart Singapore).

However, the bank stated it would watch for any tweaks to BNM’s inflation outlook, given that the diesel subsidy rationalisation was implemented on June 10.

“Our initial estimate is a modest 0.1 percentage point (ppt) impact on inflation given the targeted nature of the subsidy cut.

“However, we will keep an eye out for second-round effects, especially as there may be further subsidy rationalisation amid Malaysia’s growth recovery,” it said in its global research note.

StanChart Singapore said it would also monitor changes in BNM’s assessment of the ringgit, following the central bank’s note in May 2024 stating that “the ringgit currently does not reflect Malaysia’s economic fundamentals and growth prospects”.

“We view this as an upgrade to the central bank’s view from March 2024 when it said ‘the ringgit is currently undervalued, given Malaysia’s economic fundamentals and growth prospects’,” it added.

At 9.05am, the ringgit was flat at 4.7070/4.7130 against the US dollar compared to Friday’s close of 4.7065/4.7110.

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