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BNM ​Preview – January 2021​

BNM

BNM Preview: Tight Call

  • The declaration of nationwide state of emergency and reinstatement of the Movement Control Order (MCO) in provinces which contribute 2/3 of Malaysian GDP knocked economic recovery on its head, complicating the conundrum faced by Bank Negara Malaysia. This week's decision is a very close call. Analysts are almost evenly split on whether BNM will lower the Overnight Policy Rate by 25bp. We see a strong case for a reduction to the OPR at the upcoming meeting, but the "wait-and-see" scenario is very much on the table.
  • Please note that the preview was compiled before Malaysian government expanded the lockdown to all states but one.
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