fbpx

Bank Negara likely to cut OPR in 2015, says UBS

Property News/ 20 December 2014 Leave a comment

According to UBS, Bank Negara is likely to cut its overnight policy rate by 25 basis points in 2015, with lower oil prices cushioning the pressure on inflation.

Bank Negara Malaysia is likely to cut its overnight policy rate (OPR) by 25 basis points in 2015, as the fall in the oil prices would cushion the pressure on inflation, according to UBS.

The central bank last increased its OPR in July 2014 to 3.25%, after keeping it at 3% since 2011.

At its last Monetary Policy Committee meeting in September 2014, it decided to maintain the rate.

UBS’s Singapore-based senior economist, Asean and India, Edward Teather, said inflation was unlikely to be high in Malaysia, estimating it to be 3.9% next year. This, he said, was well below the government’s estimation of 4.5%.

The introduction of Goods and Services Tax in April 2015 would lead to higher inflation, but would be capped by lower crude oil prices with possible increase in demand for the non-oil sector, he said.

In 2015, crude oil prices was expected to average at US$70 per barrel, and in 2016 US$80, said Teather.

“Higher household debt level means that Bank Negara is not going to embark on major rate-cutting cycle.

“At the same time the government’s revenue is going to be constraint by lower oil revenue, limiting its ability to help support the economy,” he said at a conference call here today.

The bank also estimated that inflation would be reduced to 2.5% in mid-2016.

Teather said the Malaysian Government would be able to meet its fiscal deficit target of 3% in 2015 despite a challenging economic environment.

“If the crude oil price averages around US$70 and US$75 per barrel, the government should be able to manage the situation and its deficit target could be achieved,” said Teather.

He said the ringgit was expected to reach the 3.50 level against the US dollar by end-2015 albeit at a slower pace, should the Asian currencies continue its downward trend against the greenback.

“We think the stabilising oil price and the ability of the Malaysian investors to bring capital home from abroad will help stabilise the currency,” he said.

Source: Bernama

Tags:
RELATED PROPERTIES FOR SALE/RENT AT
  1. w
    December 22nd, 2014 at 14:02 | #1

    Just as we thought house price may stable (hopefully slightly reduce), but interest reduction as shown in other places in the world, would result in more property purchase.
    Not sure the 2010-2011 mad jump can happen again if OPR reduce?
    Now dilemma, to buy now or wait again?

    Anyone share view here?

  2. f
    December 22nd, 2014 at 15:42 | #2

    Are you talking about Penang? It depends. Do you already own a house and thinking of buying for investment? Or buying your first home?

  3. newkid29
    newkid29
    December 22nd, 2014 at 23:23 | #3

    From my personal point of view, I doubt the price will increase further. Stabilize maybe….

    Aren’t the global financial recovery just started?

    Anyone got any other idea?

  4. IsaacTan
    IsaacTan
    January 2nd, 2015 at 19:04 | #4

    Seems reduction of interest rate will not happen with the new implementation of BR for loan.
    Anyone have any idea?

  1. No trackbacks yet.
(You can also Login/Register to submit your comment using unique ID)

COMMENT GUIDELINES

  • Respectful Conduct: All comments must be respectful. Abusive, offensive, misleading or inappropriate language will be removed.
  • Relevance: Political or off-topic comments may be removed.
  • No Spam or Self-Promotion: Comments that are promotional or appear to be spam will be removed. Please refrain from sharing links or contact information in the comment.
  • Moderation: We reserve the right to review, edit, or delete any comments that violate these guidelines.
  • All advertisement in the comment will be removed. Please contact us for advertising opportunities.



To advertise your property in this page under "Related Properties for Sale/Rent":
 1. Submit your property at PenangPropertySale.com, it's FREE!
 (Please do not advertise your property in the comment)