The Small and Medium Enterprises Association (SAMENTA) has welcomed Bank Negara Malaysia (BNM)’s announcement to maintain the current level of overnight policy rate (OPR). BNM today announced that the OPR will remain at 2.75%.
While many are surprised with BNM’s move as they had been expecting a revision based on ‘significant external risks’ and ‘rising inflation’, SAMENTA has been calling for the OPR to be maintained over the past 6 months.
“In fact, we had wanted it to remain at 2.5%,” said SAMENTA chairman Datuk William Ng in a posting on the social platform LinkedIn.
“A lot of the inflationary pressures we are seeing are the results of pent-up demand as factories and operations close down and scale down during the pandemic.
“Climate change, political tensions and a rise of nationalism globally did not help. It’s almost a perfect storm – resulting in prices shooting through the roof in a very short period,” he said.
However, Ng noted that the business community is beginning “to see the light at the end of the tunnel, as productions scale up, the logistics backlog clears up, and consumers and producers begin to understand the new normal we are operating in.
“China’s border reopening will help too. We are already seeing normalisation in input costs – and this trend looks like it will hold.
“So, in short, not only is an OPR hike not necessary, but we can also even argue that we can go counter-intuitive and encourage more business borrowings to drive growth. Our businesses, especially SMEs, are treading carefully.”
Ng said: “This is where firm leadership and a strong message are essential – to get everyone out of their cocoon again. Kudos BNM and the MPC (Malaysia Productivity Corporation).”
