Malaysia: BNM seen on-hold at the March meeting – UOB

The Malaysian central bank (BNM) is forecast to keep the Overnight Policy Rate unchanged at 1.75% at its next meeting, suggested Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group.

Key Quotes

“We expect Bank Negara Malaysia (BNM) to keep the Overnight Policy Rate (OPR) unchanged at 1.75% at the coming monetary policy meeting on 4 Mar.”

“Despite weakness in GDP and extension of MCO 2.0, we think BNM is less inclined to use broad and blunt monetary policy tools at this stage. BNM has kept its key policy rate on hold since Sep 2020.”

“We think that BNM may be more inclined towards targeted measures to support an uneven recovery such as upsizing the support funds for SMEs and hard-hit segments. Meanwhile economic sentiment should improve as the government has allowed most economic sectors to reopen while the vaccine program kicks-off today.”