BNM Watch: No Change

Unlike the last time, the Monetary Policy Committee’s statement yesterday was an anticlimax (excerpt):

Monetary Policy Statement

At the Monetary Policy Committee (MPC) meeting today, Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 3.00 percent.

Global growth has moderated in the recent months as growth in the advanced economies slowed by more than expected following the greater policy uncertainties, worsening of confidence and heightened financial market volatilities, amidst continued weaknesses in labour market conditions. Going forward, the advanced economies are expected to register a slower pace of growth than earlier anticipated...

...In the domestic economy, recent indicators point to slower growth in external demand following the weaker global economic environment. Domestic growth prospects, however, continue to remain positive, underpinned by the expansion in private consumption and private investment. Employment conditions remain favourable amid sustained business and consumer confidence. The public sector will also continue to support economic growth. Moving forward, the more challenging external environment has, however, increased the downside risks to the domestic economy...

...Going forward, inflation is expected to remain relatively stable for the rest of the year. While cost-push inflation continues to remain, the pace of increase is expected to be more gradual. The upside risks to inflation will also be contingent on whether the strength of domestic demand will be sustained, in the event of further deterioration in the external conditions...

There was also no mention or separate statement on the SRR, which remains at 4%. Given the data coming out lately, the chance of an interest hike at the next meeting on November 11 (also the last for the year) is also vanishing – though that outlook may change if, as they say,  conditions change in the next couple of months.