Bank Negara has the power to determine OPR increases without government intervention

PETALING JAYA: Bank Negara Malaysia (BNM) has the right and authority to make decisions regarding the Overnight Policy Rate (OPR) without the need for government intervention to ensure the country’s economic stability.

The Prime Minister, Datuk Seri Anwar Ibrahim said, the rights and powers have been given specialization as stipulated in the rules and laws of this country.

“Changes regarding OPR are the decision of Bank Negara (Malaysia) and not the Ministry of Finance. If you want to talk, I can talk. But that is the ‘prerogative’ (right to do something) of BNM,” he said in a press conference after the Cabinet meeting today.

He said this in response to questions regarding the impact and actions by the Ministry of Finance following the expected increase in OPR twice by BNM.

OPR represents the minimum interest rate charged among banks for interbank loans set by BNM to control the money supply and influence the direction of the country’s economy.

The interest rate on public loans will be affected the same when the interest rate on money loans between banks is affected because banks transfer higher loan costs to consumers through interest rate increases.

Anwar said, BNM was given the mandate to promote monetary and financial stability that is conducive to the country’s continued economic growth.

Commenting further, he said, a joint discussion involving BNM Governor, Tan Sri Nor Shamsiah Mohd. Yunus and the Minister of Economy, Mohd Rafizi Ramli will be done before drafting the 2023 Budget.

“I invited the Governor of Bank Negara (Malaysia) and the Minister of Economy to have a discussion. I remember this approach that I used to do. I am no stranger, because the actions of any party will also involve the entire economic policy,” he said.

Anwar is scheduled to present the 2023 Budget in the Dewan Rakyat on February 24 at the First Session of the 15th Parliament. – MESSENGER

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