THE government does not intervene in decisions on the overnight policy rate (OPR) as this is determined by Bank Negara Malaysia’s (BNM) monetary policy committee (MPC), said Finance Minister Tengku Zafrul Tengku Abdul Aziz.

The finance minister said the OPR comes under the Central Bank of Malaysia Act 2009 and the government does not interfere in its affairs.

“Many say the government prioritises the banks (by increasing the OPR), but this is not a government decision, and neither does the government interfere in this (OPR) matter. This (perspective) should be corrected.”

“The OPR increases do not enrich the banks because they have to pay higher interest rates to depositors,” he told reporters after officiating the Entrepreneurs and Cooperatives Development Ministry’s 2022 Entrepreneurs and Cooperatives Tour Programme in Kuala Selangor today.

Tengku Zafrul said the country’s OPR is now at 2.5% after BNM raised 75 basis points since January compared to 3% before the Covid-19 pandemic.

“It is necessary to compare with other countries’ bank rates, some of whom have raised by more than 225 basis points but we are still at the 2.5% level. Is this high when compared with the 6.9% growth in the first half of the year, and the second quarter growth of 8.9%?

“The country’s OPR before the Covid-19 pandemic was at least 3% since 2013. So, it (current OPR rate) is still low and the monetary policy is still accommodative,” he said.

The finance minister said he is confident that the Malaysian economy will be able to achieve the official 2022 gross domestic product (GDP) growth projection of between 5.3% and 6.3%. – Bernama, September 17, 2022.