OPR stays at 3.00 per cent

Bank Negara Malaysia (BNM) has decided to maintain the Overnight Policy Rate (OPR) at 3.00 per cent.

This decision was made when the central bank’s Monetary Policy Committee (MPC) convened earlier today.

In a statement, BNM says that “the global economy continues to strengthen with growth becoming more synchronized across countries”.

The decision to hold the OPR steady comes as Malaysia recorded phenomenal first quarter GDP growth at 5.6%. Second quarter GDP growth will be announced soon.

BNM also said that growth is expected to be driven by domestic activity and stronger external demand in Asia.

They stated that “risks to the global growth outlook arise mainly from political and policy uncertainties in the major economies”.

It is widely expected that in Malaysia, general elections will continue to be the talk of the market. And with the central bank having the view that political risks is closely monitored, markets would react positively on way forward.

Headline inflation moderated to 3.9% in May 2017. The central bank said that this is “due mainly to the decline in domestic fuel prices during the month”.

The bank continues by stating that headline inflation is expected to moderate in the second half of the year mainly reflecting the waning effect of global cost factors

“At the current level of the OPR, the stance of monetary policy is accommodative and supportive of economic activity.

The MPC will continue to assess the balance of risks surrounding the outlook for domestic growth and inflation” said BNM.

Over in the U.S. Janet Yellen’s position as the central bank chair is under intense pressure as rumours that President Donald Trump not renewing her contract continues to gather steam.

Elsewhere, interest rates are holding steady as the global economy continues its path on worldwide recovery.