Business Telegraph

.
The Times Real Estate

.

Octa forecast: OPR hike will likely be on hold due to falling inflation

  • Written by Telegraph Magazine

KUALA LUMPUR, MALAYSIA - Media OutReach - 31 October 2023 - Octa analyses the likelihood of the BNM keeping the Overnight Policy Rate (OPR) unchanged at 3% at the upcoming Monetary Policy Committee (MPC) meeting on 1 – 2 November.

Learn about the potential impact on the Malaysian ringgit.

Key Takeaways

  • Headline inflation in Malaysia declined to 1.9% in September.
  • The Overnight Policy Rate (OPR) is unlikely to be raised at the next meeting, given the recent decline in headline inflation to below 2%.
  • The pause in the OPR change will continue to hurt the ringgit, and the probability of USDMYR rising above 5.0000 remains high.

The Monetary Policy Committee (MPC) of the Bank Negara Malaysia (BNM) will meet on 1 – 2 November to decide on monetary policy. An overnight policy rate (OPR) increase may no longer be relevant, given the recent decline in headline inflation.

Notably, Malaysia's current OPR currently stands at 3%, while Malaysia's headline inflation, as measured by the consumer price index (CPI), eased to a 1.9% increase in September 2023, the lowest over the last two and a half years. The inflation rate for September 2023 was slightly below the consensus forecast of economists polled by Reuters and Bloomberg, at 2.2% and 2.1%, respectively. The forecast number considers significant external and internal risks to domestic inflation that should be monitored closely in the near term, namely rising energy prices and the ringgit falling.

'In a low inflation environment, the decision to change the OPR is no longer relevant', said Kar Yong Ang, the Octa financial market analyst. 'This situation will continue to hurt the ringgit, which may eventually provoke a return to the monetary tightening strategy', he added.

The ringgit depreciation is also affected by such factors as expectations that the U.S. federal funds rate remains high without clear signals of its decline. In addition, Chinese economic indicators were weaker than expected, and the easing of the People's Bank of China's monetary policy negatively impacted investor sentiment in the region. The probability of USDMYR growth above 5.0000 remains high.
Hashtag: #Octa

The issuer is solely responsible for the content of this announcement.

About Octa

is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services already utilised by clients from 180 countries with more than 42 million trading accounts. Free educational webinars, articles, and analytical tools they provide help clients reach their investment goals.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

Entrepreneurs & Leaders

Is It Ethical to Buy Clubhouse Room Visitors? Debunking Common Myths

Clubhouse has become a go-to platform for discussions, networking, and sharing ideas in real-time. With so many rooms to...

Work Injury: Should You Call A Lawyer After Work Accident?

Although work injuries are not common, especially for those who don’t work in industries, they sometimes occur. Most e...

SEO: Revolutionizing The Presence On the Internet Through Services Offered

Establishing a web presence cannot be overemphasized for any business to be competitive in today’s digital-first economy...

Elevate Your Workplace Safety: The Power of Premium Hi-Vis Work Shirts

Hi-vis work wear is becoming popular in Australia. These reduce the risks of accidents by enhancing visibility. Also, th...

Essential Sweatshirt or Essential Hoodie: Which One Is Right for You?

When it comes to high-end streetwear, Fear of God Essentials Sweatshirt  has carved out a niche for itself, blending l...

Steam Cleaning Carpets vs Other Methods: Which One is Better?

Maintaining clean carpets is necessary for the overall look and health of your home or business. With various cleaning...

Buy vs. Lease: 6 Tips for Making the Right Call on Business Equipment

Photo: chris robert / Unsplash Every major equipment purchase presents business owners with a crucial decision: buy or ...

Breaking Down the Basics of Business Partnership Agreements in Sydney

Agreements Over Business Partnership are important as they discuss and define the roles, functions, and expectations...

20ft Shipping Containers as a Sustainable Choice for Construction Projects

There is a sharp increase in the demands for sustainable building materials in modern architecture. Among the newest...