OPR rate Malaysia – November 20

Overnight Policy Rate - November 20

Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) has decided to retain the Overnight Policy Rate (OPR) at 1.75%.

In a statement on Tuesday, the committee highlighted that the latest indicators for Malaysia point towards significant improvement in economic activity in the third quarter.

Although The global economy continues risk aversion remains elevated. The outlook is still subject to downside risks and uncertainty, primarily due to the risk of a resurgence of the pandemic and weaker labor market conditions.

OCBC said if gross domestic product in the fourth quarter should be impacted further by either a slump in exports or an enforced shutdown of business activities, then BNM may even have an inter-meeting decision (ahead of its next scheduled meeting in Jan 19-20 2021) to cut as well – if necessary.

CGS CIMB Research said that while it had anticipated a 25-basis point downward revision and UOB Research concurred, saying the key rate should stay at 1.75% through 2021, unless significant downside risks appear.

We expect further fiscal support measures in Budget 2021 that could include extension of cash aid, wage subsidies, and assistance for SMEs. Banks have intensified engagements with customers that require further assistance and offered ongoing support for households and SMEs that are facing difficulties.”

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