Premature to conclude there will not be further rate cuts — AmBank Research

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KUALA LUMPUR (Sept 11): AmBank Group Research said it remains relatively premature to conclude that there will not be further rate cuts after Bank Negara Malaysia (BNM) decided to leave the policy rate unchanged in the latest MPC meeting, holding the overnight policy rate (OPR) at 1.75%.

In a note today, AmBank chief economist and head of research Dr Anthony Dass said as pointed out by BNM, the downside risk remains although the economic activity continues to recover from the trough in April supported by the stimulus measures.

“Does this mean that BNM has put the brakes on rate cutting following a cumulative 125bps in 2020 to bring the OPR to a record low of 1.75%?

“Hence it is vital at this point in time to realise that just because we are seeing some good economic numbers, it does not mean the worst is over.

“Besides, we need to recognise that we still have a long way to go before this pandemic is really over.

“Thus, we cannot totally discount that rate cuts have come to a total halt,” he said.