PETALING JAYA: Bank Negara Malaysia (BNM)’s recent decision to retain the overnight policy rate (OPR) at 3% is the right decision and its accommodative approach to the domestic economy is needed for economic stabilisation, said UiTM Sabah senior lecturer (political economy) Associate Professor Firdausi Suffian.
He opined that an OPR increment will deter foreign direct investment and affect the growth of local businesses.
“If they increase OPR this can make borrowing expensive and put pressure for repaying loan. This can disincentivise investors from investing in Malaysia and slowdown business activities. We don’t want this to happen ... we need to keep our economy stable, price and financial institution stable,” he told SunBiz.
He said that a lot of investors are playing the wait-and-see approach due to uncertainty and believes that the central bank’s decision “is justified, for now at least” in maintaining economic growth.
“The highest OPR recorded in Malaysia is 3.5% in 2008, now is 3% so this really depends on the domestic and global economy. We can’t say that BNM will not increase OPR in the future, but really depends on various factors – performance of ringgit, financial sectors, the momentum of the domestic economy growth and so on,” he said.
Meanwhile, Malaysia University of Science and Technology (Institute of Postgraduate Studies) dean Professor Geoffrey Williams believes that the central’s bank decision to hold rates is “the right decision for the right reasons”.
“Consistent with its mandate, BNM has noted that price stability has improved as inflation is slowing and will continue to slow for the rest of the year. The financial sector is sound and economic growth is steady, the decision will support this increasingly stable environment.
“Holding rates steady around the normal level will be positive for the economy especially since there are some headwinds from global growth. It will help businesses and consumers to be more confident and more stable, as well as allow policy attention to switch to long-term structural issues,” he told SunBiz.
Williams said that BNM’s decision was in line with his position that rates can safely be held steady for the rest of the year, as the data on price stability, financial stability and growth are in line with the central bank.
Source: The Sun Daily
A word from our sponsor:
Need Help With Your Personal Finance / Money Issue or need a coach to help you structure or just want to learn the financial skill to self manage your financial matters and retirement. iLearnFromCloud.com
Need to solve a problem quickly, now you can solve it by learning the art of problem solving Art Of Problem Solving
Feeling hungry. Latest food news from Best Restaurant To Eat Malaysian Food and Travel Blog
Memory loss. Need to organize better. Solve problem fast with Free Mind Mapping Software Mind Mapping 101
Need A Customized System Development for your business or Going Paperless XPERT TECHNOLOGIES - Empowering The Paperless Economy
No comments:
Post a Comment