Published on 04 May 2021.
RAM expects Bank Negara Malaysia (BNM) to hold the Overnight Policy Rate (OPR) at 1.75% at its next policy meeting on 6 May 2021. Strong export demand, the ongoing national vaccination programme and various supportive fiscal as well as monetary policies should keep up the pace of economic recovery for now. The present level of interest rates should be sufficient to sustain the current recovery momentum.
Recent data point towards a stronger-than-expected recovery for exports. The overall industrial production index rose 1.5% in February (2018-2019 average: +2.8%), underpinned by the manufacturing sector. While Malaysia’s domestic conditions are still tepid, the global revival has been spurring demand for our manufactured goods. This has in turn propped up Malaysia’s manufacturing output. Exports surged 31.0% in March (February: +17.6%), lifted by the manufacturing segment (March: +35.8%; February: +20.9%).
Sources: RAM and Department of Statistics Malaysia
Nur Nadia Mazlan
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