KUALA LUMPUR (June 8): Malaysia’s monetary policy will remain unaggressive in future, with adjustments based on the economic growth and inflation, according to Bank Negara Malaysia (BNM) deputy governor Datuk Abdul Rasheed Ghaffour.

“In terms of timeline and the level of extent of [the] adjustments itself, what is important is [that] we will not need to be aggressive.

“We are not in the same situation as we see in the advanced economies in terms of inflation rate and strength of demand,” he said during Invest ASEAN 2022 hosted by Malayan Banking Bhd (Maybank) on Wednesday (June 8).

Abdul Rasheed noted that the central bank has to gauge Malaysia’s economic “realities” — growth and inflation — and move to adjust the overnight policy rate (OPR) as appropriate.

“What we are doing is to appropriately calibrate our monetary policy accommodation based on the outlook of both growth and inflation.

“The terminal rate, I think we should not be fixated on a particular number; what is important is that we need to calibrate the monetary policy that would support sustainable growth, moving forward,” he highlighted.

BNM’s Monetary Policy Committee on May 11 raised the OPR by 25 basis points to 2% from a record low of 1.75% due to increased global inflationary pressures, as well as the sustained reopening of global economy and improvement in labour markets.

With the normalisation of economic activity, economists foresee further rate hikes throughout 2022 and 2023.