MPC of Bank Negara will release the first 2020 Monetary Policies Statement today. The statement among others is to dictate what will be the OPR. Economists predicted that OPR will be maintained at 3%.

In my opinion, cutting OPR by 25 basis points is more sensible given the lack of fiscal stimulus from the government side.

Clearly the ministers run out of ideas on how to take off the economy. Neither the economy nor the car was flying.

Hence by cutting the OPR, will create more liquidity in the market and stimulating more investment locally. Create more jobs, boosting the stock market and property investment activities. The kind of story we want to hear in 2020.

On the flip side, lowering OPR might put more pressure on Ringgit Malaysia against the peer Asian currencies. However, the regional central bank has cut its interest rate earlier on.

Indonesia had cut its interest rate by 25 basis points since September last year. Thus releasing some pressure on the exchange rate.

I believe that Bank Negara has more information and resources in dictating what is sensible OPR and free to make policies without political interference.

Wassalam.

Elias Abllah

Lower OPR to Stimulate Malaysia Economy
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