Business Daily Media

Men's Weekly

.

Bank Negara Malaysia (BNM) will likely increase the overnight policy interest rate (OPR) to 3.25%

KUALA LUMPUR, MALAYSIA - Media OutReach - 4 July 2023 - The Monetary Policy Committee of the Bank Negara Malaysia (BNM) will meet on 5–6 July to make a decision on monetary policy.

OctaFX experts anticipate a 25 basis points increase in the interest rate, bringing it to 3.25%. This article delves into the factors influencing this decision and the potential impact on the Malaysian ringgit.

OctaFX.jpg

The Monetary Policy Committee of the Bank Negara Malaysia (BNM) will meet on 5–6 July to make a decision on monetary policy. BNM is expected to increase the interest rate by 25 basis points to 3.25%

At the most recent meeting, the Monetary Policy Committee (MPC) of Bank Negara Malaysia decided to increase the Overnight Policy Rate (OPR) by 25 basis points to 3.00 percent, citing the continuing expansion of Malaysia's economic activity in the first quarter of 2023 after a strong performance in 2022. The economy continues to be driven by resilient domestic demand supported by strong labour market conditions and a stronger-than-expected rebound of China's economy.

The Monetary Policy Committee noted that core inflation has been on a downward trend in recent months due to the moderating influence of cost factors. However, it anticipates that core inflation will remain high due to sustained demand. Therefore, the committee's last monetary policy statement indicated the need for further normalisation of monetary accommodation, citing solid domestic growth as a key factor.

According to the latest monthly highlights and statistics, headline inflation in Malaysia continued to decline, reaching 2.8% in May. This decrease was mainly due to non-core CPI components, notably lower inflation in fuel (-0.2 percentage points) and fresh food (-0.1 percentage points). Core inflation also declined slightly to 3.5% (from April’s 3.6%), primarily influenced by lower inflation in communication services.

External factors influenced domestic financial markets, with investors adopting a risk-off approach due to concerns over a potential US Federal Reserve rate hike and a slower-than-expected recovery in China. As a result, the ringgit depreciated by 3.4% against the US dollar.

The renewed hawkish rhetoric from the US Federal Reserve further sets the stage for the weakening of the ringgit. The current US interest rate is 5.25% compared to 3% in Malaysia, and investors believe the gap will widen. When the US offers higher yields, foreign entities tend to convert their Malaysian assets into US dollars and divert their investments to the US market. If Bank Negara Malaysia leaves the rate unchanged, it is expected to accelerate the weakening of the ringgit, which could reach a multi-year high of 4.75 quickly.

However, considering the resilient state of the economy, Bank Negara Malaysia is likely to raise the overnight policy rate (OPR) by 25 basis points to 3.25% at the end of the two-day meeting. This move aims to support capital markets and stabilise the USDMYR exchange rate, which is anticipated to trend lower (with ringgit appreciating) with a target range of 4.50 to 4.57 amid a decreasing interest rate differential between Malaysia and the US Federal Reserve.


Hashtag: #BNM #interestrate #MYR #USD

The issuer is solely responsible for the content of this announcement.

About OctaFX

is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services already utilised by clients from 180 countries who have opened more than 21 million trading accounts. Free educational webinars, articles, and analytical tools they provide help clients reach their investment goals.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

In the APAC region, OctaFX managed to capture the ‘Best Forex Broker Malaysia 2022’ award and the ‘Best Global Broker Asia 2022’ from Global Banking and Finance Review and International Business Magazine, respectively.

News from Asia

HDBank: A Leading Vietnamese Bank Named Among ASEAN’s Top 5 in Corporate Governance for 2025

HO CHI MINH CITY, VIETNAM - Media OutReach Newswire - 29 July 2025 - The Ho Chi Minh City Development Commercial Joint Stock Bank (HDBank) has been named one of the Top 5 Vietnamese listed compani...

Octa market outlook: navigating one of the most eventful weeks of the year

KUALA LUMPUR, MALAYSIA - Media OutReach Newswire - 28 July 2025 - Forex traders are bracing for what could be one of the most pivotal trading weeks of the year. The calendar is packed with high-im...

Lee Kum Kee Supports the 2025 Asian Championship of World Chinese Cuisine

Where culinary elites are brought together to celebrate Asian gastronomyHONG KONG, CHINA - Media OutReach Newswire - 29 July 2025 - The 2025 Asian Championship of World Chinese Cuisine, organised ...

OPPO Launches AI Phone Reno14 Series and Upgraded AI-Powered Intelligent After-Sales Service System

SHENZHEN, CHINA - Media OutReach Newswire – 29 July 2025 - Following the recent global launch of the Reno14 Series—the latest OPPO AI phone featuring cutting-edge AI imaging capabilities and trend...

Hong Kong Developed Revolutionary Sauce EXOTICA UMAMI [EX M] Impresses Acclaimed International Chefs

Top Italian Restaurateur Paolo Monti of Hong Kong’s popular AMA Italian Ristorante adds new pork collar meat dish to menu incorporating innovative new seasoning sauceHONG KONG SAR - Media OutReach...

Vinmec Central Park Performs Vietnam’s First SEEG using AutoGuide Robotic Guidance System for a child diagnosed from refractory epilepsy

HO CHI MINH CITY, VIETNAM - Media OutReach Newswire - 29 July 2025 – A major breakthrough in Vietnam's neurological treatment was recently achieved as doctors at Vinmec Central Park Internati...

VinFast joins the Association of Indonesia Automotive Industries

JAKARTA, INDONESIA - Media OutReach Newswire - 25 July 2025 - VinFast officially announced its membership in the Association of Indonesia Automotive Industries (GAIKINDO), marking a significant mi...

XTransfer Announces Over 700,000 Global Customers

Emerging Markets Become the "Blue Ocean" for Enterprises Going GlobalHONG KONG SAR - Media OutReach Newswire - 29 July 2025 - XTransfer, the World's Leading & China's No.1 B2B Cross-Border ...

Chun Wo Innovation Student Awards 2024 Successfully Concluded Four Outstanding Projects Showcase the Future of Engineering Innovation

HONG KONG SAR - Media OutReach Newswire - 29 July 2025 - Organised by Chun Wo Development Holdings Limited ("Chun Wo"), the Chun Wo Innovation Student Awards 2024 ("CWISA") concluded successfull...

HEIDELBERG agrees strategic partnership with defense specialist VINCORION

HEIDELBERG moves into defense industry VINCORION Advanced Systems GmbH specializes in power systems for safety-critical applications HEIDELBERG impres...

Small-Business Cash-Flow Playbook 2025

An educational guide to managing ATO debt, real-time super and growth finance in Australia’s new landscape Why ATO debt just became the most expe...

Landowners Offered $30,000 Per Year for Just 1 Hectare: The Rise of 5MW Battery Projects Across Australia

In a pivotal shift reshaping Australia’s renewable energy landscape, landowners in Queensland, New South Wales, and Victoria are being offered up ...

Major national security tech alliance launches with Aerologix a founding member

Australia’s leading drone intelligence pioneer bolsters sovereign tech power Australia’s leading aerial data and drone intelligence platform, Aer...

Chris Hancock AM Honoured as 2025 Communications Ambassador

SYDNEY Chris Hancock AM, former CEO of AARNet, has been awarded the prestigious Communications Ambassador title at the 2025 Telecommunications Indus...

Baby boomers are driving development feasibility leading to larger apartments

As residential developers continue to grapple with feasibility issues on apartment projects, the sector is struggling to deliver volumes of new st...

Hays launches FY25/26 Salary Guide: ‘Salary Paradox’ deepens as pay rises fail Australians

Rising dissatisfaction with pay, progression and perks is fuelling a new wave of career change in FY25/26, as Australians demand more from employe...

Sell by LayBy