KUALA LUMPUR: Bank Negara Malaysia (BNM) today reiterated that it considers the current monetary policy stance as appropriate and accommodative given the prevailing outlook and growth of inflation in 2022.
BNM Governor Tan Sri Nor Shamsiah Mohd Yunus said the central bank recognised that the unprecedented conditions that warranted significant monetary support during the height of the COVID-19 pandemic were almost over.
With the overnight policy rate (OPR) at a historical low of 1.75 per cent, the central bank was mindful of the consequences of keeping it low for an extended time, which could lead to an unhealthy buildup in financial imbalances.
"Nevertheless, we are closely monitoring for signs and potential effects as to whether the price pressures could become entrenched and reinforced by domestic demand factors.
"We would balance all these considerations and will ensure that any potential adjustments to the OPR may also mean that we are confident that we are on a firmer growth trajectory," she told a virtual media briefing today, in conjunction with the publication of BNM's Annual Report 2021.
Nor Shamsiah said the performance of the ringgit was relatively stable, in line with improvements in regional currencies.
On inflation, the central bank expects headline inflation to be around 2.2 per cent to 3.2 per cent in 2022, but the inflation outlook would depend on the global commodity markets and supply related disruptions.
"Our ringgit will be market-determined. The consumer standpoint to the direct impact of rising oil prices on fuel inflation is expected to be muted as we are assuming the price ceiling of retail fuel prices will remain in place throughout the year," said Nor Shamsiah.
Meanwhile, she said banks have increased their vigilance over credit risk developments, particularly for large borrowers and those in vulnerable sectors.
As a result, banks have been proactive in identifying problematic assets early and making adequate provisions against potential credit losses.
"Therefore, the banking system has built up strong buffers and enabled them to absorb significant losses including from large borrowers. Currently, provisions against losses in the banking system are around a historical high of 143 per cent.
"This is why we do stress tests that we conduct regularly for the banking system," the governor noted.
-- BERNAMA
Bernama
Wed Mar 30 2022
BNM Governor Tan Sri Nor Shamsiah Mohd Yunus said the central bank recognised that the unprecedented conditions that warranted significant monetary support during the height of the COVID-19 pandemic were almost over. - BERNAMA
Motorcycling - Marquez wins Australian MotoGP after intense battle with Martin
The 31-year-old, third in the championship standings, has now won the Australian MotoGP four times in the premier class.
Prabowo takes up Indonesian presidency, vows to tackle corruption, other issues
Indonesia's Prabowo Subianto on Sunday took over as president of the world's third-largest democracy, vowing to combat internal issues
Nepal's Sherpas deserve more, says teenager who scaled world's 14 tallest peaks
Sherpas are known for climbing skills that make them the backbone of mountain expeditions.
Inside the underground lab in China tasked with solving a physics mystery
China will soon collect neutrino data, aiming to unravel one of particle physics' biggest mysteries.
Millions in Cuba still without power as major outage persists
Millions of Cubans remain without electricity because of a prolonged outage at the main power plants on the island, Anadolu Agency reported.
Surge in Gaza violence increases famine risk, monitor says
About 1.84 million people across the besieged Palestinian enclave are living through high levels of acute food insecurity.
Israel pounds Beirut and Gaza after rockets hit Israel's north
A drone was launched at Prime Minister Benjamin Netanyahu's holiday home.
Elon Musk promises to award $1 mil each day to a signer of his petition
He awarded a $1 million check to an attendee of his event in Pennsylvania aimed at rallying supporters behind Donald Trump.
Former special forces commander Prabowo to take up Indonesian presidency
Indonesia's Prabowo Subianto will take over as president of the world's third-largest democracy after sweeping the country's election with policies like free meals for school children
Father of Malaysian Islamic banking, Abdul Halim Ismail passes away
His dedication and pioneering spirit played an important role in shaping the journey of Bank Islam as well as leaving a lasting impact on the development of Malaysia's Islamic finance industry.
Zayn Malik postpones US tour dates after One Direction bandmate Liam Payne's death
Payne, 31, died on Wednesday after falling from a third-floor hotel room balcony in Buenos Aires, shocking fans of the boy band.
Why voters in a handful of swing states will decide the US presidential election
The contest will almost certainly be decided by just tens of thousands of voters a tiny fraction of the populace in a handful of states.
INSIGHT - Sudan's war risks 'lost generation' of children
A devastating crisis is unfolding in Sudan, where the most vulnerable members of society children are bearing the brunt of the violence.
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Trump says he would impose tariffs on China if China went into Taiwan
Republican presidential candidate Donald Trump said he would impose additional tariffs on China if China were to "go into Taiwan,"
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.