Bank Negara Malaysia increases OPR by 25bps to 2.25%

PETALING JAYA: Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) today increased the Overnight Policy Rate (OPR) by 25 basis points (bps) to 2.25%, from 2.00% previously.

The ceiling and floor rates of the OPR corridor are correspondingly increased to 2.50% and 2.00%, respectively.

OCBC Treasury Research said the fact that the committee has not gone more “ballistic” with a 50bps increase speaks of heavy preference for a “gingerly approach” in monetary policy tightening.

“That is a prudent thing given how the global recession fears are on the rise. Going forward, we see at least one more 25bps hike this year, that will be seen as a further normalisation of policy rate rather than outright tightening,” said OCBC.

MIDF Research believes the current focus of BNM’s monetary policy setting is to ensure sustainable recovery of Malaysia’s economy.

“With the rise in the core inflation trend and stronger-than-expected domestic demand, we believe BNM will raise its OPR by 50bps in the second half of 2022. At this point, we expect further policy normalisation will likely be carried out in the September MPC meeting with another 25bps hike,” said MIDF.

Following the latest OPR hike, Malayan Banking’s (Maybank) base rate (BR) will be increased to 2.25% per annum from 2.00% per annum effective tomorrow while its base lending rate (BLR) will be revised from 5.65% to 5.90%. Similarly, the Islamic base rate and base financing rate will be increased by 25bps from 2.00% to 2.25% and from 5.65% to 5.90% respectively.

In line with the revision, Maybank and Maybank Islamic’s fixed deposit rates will also be adjusted upwards. The last revision in Maybank’s base rate was on May 13, 2022 when it was increased from 1.75% to 2.00% afteran OPR hike by the same quantum.