Tuesday, May 11, 2010

Views on the OPR

I’m in the minority:

Economists widely expect interest rate hike in M'sia

They see a 25 basis points rise at Thursday's meeting

PETALING JAYA: Bank Negara may raise the overnight policy rate (OPR) by 25 basis points (bps) to 2.50% at Thursday's monetary policy committee (MPC) meeting, economists said.

RAM Holdings Bhd is anticipating a 25 bps increase in the OPR as part of the central bank's interest rate normalisation process since early March following the country's strong fourth-quarter economic performance last year.

"The increase is likely to take place to pre-empt [sic] an overshooting of asset prices which can be a result of excessive speculative behaviour in the economy, shown by the recent increase in the disbursement of loans and the spike in the local bourse's turnover ratio in March," economist Jason Fong said.

It’s more of the same from most of the rest, though Peck Boon Soon of RHB Research Institute expects the next move to be in July, as I do.

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