OPR hike risks burdening the people, says Fahmi

OPR hike risks burdening the people, says Fahmi

PUTRAJAYA: While there have been calls for the overnight policy rate (OPR) to be raised, the Prime Minister is of the view that increasing it to strengthen the ringgit’s value will not help the people, says Fahmi Fadzil.

The government spokesman said the Prime Minister believed the move would affect the people more. “There are certain parties who want Bank Negara to raise the OPR.

“What the Prime Minister is most concerned about is how this will affect the people. I believe this may not be the best time to do this. But we leave it to Bank Negara,” he said, adding that the matter was not discussed during the Cabinet meeting yesterday.

“The Finance Minister II and Bank Negara have addressed the matter. Analysts had also shared their views and their projection of the ringgit,” he said.

On Tuesday, Finance Minister II Datuk Seri Amir Hamzah Azizan was quoted as saying the ringgit was expected to strengthen against the US dollar this year as the US Federal Open Market Committee had signalled the end of interest rate hikes after raising the benchmark interest rates 11 times since March 2022 to the current rate of 5.25%-5.50%.

He shrugged off suggestions to peg the ringgit to the greenback, saying the current situation was different from the 1998 Asian Financial Crisis.

Meanwhile Amir Hamzah said the current OPR was at a fair level to help facilitate economic growth.

Data from the Department of Statistics Malaysia showed that Malaysia’s inflation, measured by the consumer price index (CPI), remained at 1.5% in December 2023, bringing the annual headline inflation in 2023 to 2.5% compared with 3.3% in 2022.

Core inflation increased at a slower pace of 1.9% in December 2023 against 2% in November 2023, bringing the annual core inflation rate to 3%.