Guan Eng: BNM should have increased OPR in January when inflation was higher, not now

·2-min read
Malay Mail
Malay Mail

KUALA LUMPUR, May 14 — DAP chairman Lim Guan Eng today questioned Bank Negara Malaysia’s (BNM) decision to increase its overnight policy rate (OPR) to 3 per cent recently.

In a statement this morning, the Bagan MP said that BNM governor Tan Sri Nor Shamsiah Mohd Yunus had expressed concern over core inflation in Malaysia remaining at elevated levels when she provided reasoning for the OPR hike.

“This has caused some confusion because core inflation had in fact moderated to 3.9 per cent in the first quarter of 2023 (announced in April this year), as compared to the final quarter in 2022 of 4.2 per cent (announced in January this year).

“If core inflation is such a big concern, why were there two interest rate pauses of no hikes in OPR by BNM in January and March 2023, even though core inflation was higher at 4.2 per cent during the final quarter of 2022 as compared to 3.9 per cent in the first quarter of 2023?

“If BNM was seriously concerned about headline and core inflation they should have immediately hiked up the OPR in January and March 2023 when inflation for the final quarter of 2022 was higher and not wait until now,” he said.

Guan Eng added that BNM’s surprise hike of OPR had caused unnecessary financial hardship to borrowers, particularly individuals and small and medium enterprises (SMEs).

On Friday, Nor Shamsiah stood by the OPR hike, saying that it was a prudent response to prevailing economic conditions, aiming to ensure sustainable growth and keep prices stable.

“Which is more cruel, an increase in the OPR or an uncontrollable rise in inflation? If we experience a sudden increase in inflation, everybody’s purchasing power will be impacted, regardless of whether they have a loan or not,” she said during a press conference.