Standard Chartered expects a 25 bps opr cut by bnm

KUALA LUMPUR: Standard Chartered expects Bank Negara Malaysia (BNM) to cut the overnight policy rate (OPR) by 25 basis points to 3.0 per cent at Monetary Policy Committee meeting today.

However, the bank also saw a high risk of delay, as the central bank maintained a neutral stance at its last meeting on March 9.

“Nevertheless, we believe a dovish signal, such as an adjustment of the “accommodative and supportive” phrase, will be sufficient to reflect a stronger growth bias,” it said in its research note.

The bank said a 25 basis points cut would not cause increased leverage.

“Given current conditions, we think a 25 basis points cut will help with debt servicing, rather than increase the financial imbalance,” it added.

Standard Chartered said BNM having maintained a neutral stance for reasons such as monetary policy, should not be seen as a silver bullet for growth which was not as weak as other developed economies.

“Indeed, monetary policy is no silver bullet, and the effectiveness of major central banks’ ultra-low interest rates is debatable.

“But Malaysia’s policy rate is just 25 basis points off its historical high. Tight fiscal policy may require more support from monetary policy,” it added.

For short-end ringgit rates, the bank said a change in monetary policy bias may put more downward pressure on the KLIBOR fixing. — Bernama

Mukah Pages sharing local news with BorneoPost Online | Borneo , Malaysia, Sarawak Daily News http://ift.tt/1TkOCrB