At its meeting today, the Monetary Policy Committee (MPC) of Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 1.75 percent.

The global economy remains on a recovery path, driven by expansion in manufacturing and services activity. Amid continued strength in global demand, supply chain disruptions, higher commodity prices and labour shortages, inflation has also risen. Nevertheless, global growth prospects will be supported by further progress in vaccination coverage and relaxation of containment measures. In several major economies, sizeable fiscal and monetary policies will continue to support the recovery momentum. Overall, the balance of risks to the global growth outlook remains tilted to the downside. This is attributed mainly to uncertainty surrounding the emergence of variants of concern, the risk of more prolonged global supply chain disruptions, and potential risk of heightened financial market volatility amid adjustments in monetary policy in major economies.

For Malaysia, economic activity weakened in the third quarter, amid the imposition of nation-wide containment measures to curb the resurgence in COVID-19 cases. However, in line with the relaxation of restrictions, latest high frequency indicators show that economic activity has recovered from the trough in July. Going into 2022, the growth momentum is expected to improve, supported by expansion in global demand, higher private sector expenditure in line with the resumption of economic activity and continued policy support. Risks to the growth outlook, however, remain tilted to the downside due to external and domestic factors. These include a weaker-than-expected global growth, a worsening in supply chain disruptions, and the re-imposition of containment measures due to the impact of new COVID-19 variants of concern.

In line with earlier assessments, headline inflation is likely to average within the projected range of between 2.0% and 3.0% for 2021, having averaged 2.3% year-to-date. Underlying inflation, as measured by core inflation, is expected to average below 1.0% for the year. Moving into 2022, headline inflation is projected to remain moderate. As economic activity normalises, core inflation is expected to edge upwards but remain benign given the continued spare capacity in the economy and slack in the labour market. The outlook, however, continues to be subject to global commodity price developments and some risk from prolonged supply-related disruptions.

The MPC considers the stance of monetary policy to be appropriate and accommodative. In addition, fiscal and financial measures will continue to cushion the economic impact on businesses and households and provide support to economic activity. Given the uncertainties surrounding the pandemic, the stance of monetary policy will continue to be determined by new data and information and their implications on the overall outlook for inflation and domestic growth. The Bank remains committed to utilise its policy levers as appropriate to foster enabling conditions for a sustainable economic recovery.

The meeting also approved the schedule of MPC meetings for 2022. In accordance with the Central Bank of Malaysia Act 2009, the MPC will convene six times during the year. The meetings will be held over two days, with the Monetary Policy Statement released at 3 p.m. on the second day of the MPC meeting.

Schedule of Monetary Policy Committee Meetings for 2022