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7th Rangers: MP SPEAKS - Hikes in OPR benefit no one except banks Lim Guan Eng

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MP SPEAKS - Hikes in OPR benefit no one except banks Lim Guan Eng
Wednesday, May 24, 2023


Malaysiakini : MP SPEAKS | Bank Negara's premature policy rate normalisation has not helped to stem the depreciation of the ringgit to the US dollar but may harm borrowing costs, hinder business expansion and hamper sustainable economic growth.

Strengthening the value of the ringgit was among the reasons cited by those defending the 25 basis points hike in the overnight policy rate (OPR) on May 3 by Bank Negara. It is noteworthy that in a space of three weeks, the value of the ringgit has dropped from RM4.45 on May 3 to RM4.58 today. To date, many businesses affected by the drop in the value of the ringgit are still awaiting Bank Negara's response.

Bank Negara’s main argument for the OPR hike is the need to rein in core inflation and implement policy rate normalisation following full economic recovery from the Covid-19 pandemic.   There is genuine concern whether the latest OPR hike will affect sustainable economic growth, making it difficult for Malaysia to repeat the encouraging 5.6 percent first-quarter GDP growth in the second quarter of 2023.

According to S&P Global Market Intelligence, the seasonally adjusted Malaysia Manufacturing Purchasing Managers’ Index (PMI) remained below the 50-point mark separating monthly expansion and contraction, with the index unchanged at 48.8 in April 2023. This warning signal of a subdued Malaysian manufacturing sector at the start of the second quarter of this year is borne out by the April 2023 trade growth falling by 14.5 percent year-on-year (y-o-y) to RM198 billion amidst global economic uncertainties.

There is also some confusion about hiking up OPR now to check core inflation, when core inflation had in fact moderated without any hike in OPR, to 3.9 percent in the first quarter of 2023 as compared to the final quarter in 2022 of 4.2 percent.

Salvage Malaysia : 1) did ringgit appreciate? No

2) are inflationary pressures curbed? No

3) did all banks who increased their lending rates by 0.25% increased their deposit rates equally by 0.25%? No

4) are businesses and individuals suffering even more? YES!

Someone is just thinking like a textbook technocrat mimicking the foolishness of their US counterpart. Isn’t it time someone ought to get the sack?

WhiteHawk2009 : BNM is nothing more than another failed entity It’s supposed to act as a gatekeeper to protect the public interest but instead seems more concerned with apple polishing !

Large amounts of money transferred which should have been red flagged were overlooked and no action was taken on the perpetrators Just Another ineffective institution to ensure some get employed and always at the cost of the Rakyat …truly sad 🤦🏽‍♂️

Read it all here.....

posted by Major D Swami (Retired) @ 12:22 PM  
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