COMMENT | Monetary policy pre-emptive, not premature

COMMENT | Monetary policy decisions affect many facets of a nation’s economy. As such, it is often the case that such decisions are closely watched and debated not just by financial markets, but also by the public.

The lively conversations around the Bank Negara Monetary Policy Committee’s (MPC) decision to raise the overnight policy rate (OPR) by 25 basis points on May 3 exemplify this fact.

Deciding on the OPR isn’t something we take lightly. There are many factors that the MPC considers. Our analysis is based on a broad range of forward-looking data and engagement with various industries and consumers.

In addition to the monetary policy statement itself, we have also put out other explainers (eg: a simplified snapshot of our Monetary Policy Statement, and FAQs) on our website and on social media.

In this commentary, I hope to provide further context and colour to the MPC’s actions and clarify some points that have been made in the public discourse that we have been observing...