The overnight policy rate (OPR) is expected to remain unchanged at three per cent in 2024 with Malaysia’s producer price index (PPI) inflation moderating to 0.3 per cent year-on-year (y-o-y) in August 2024 from 1.3 per cent y-o-y the previous month.
The PPI measures price changes of goods at the producer level.
MIDF Amanah Investment Bank Bhd research arm, MIDF Research said the easing of PPI inflation generally suggests a limited effect from policy changes, such as diesel subsidy rationalisation on local production costs. “On that note, with inflation still under control, we do not foresee the OPR to be adjusted this year,” it said in a note today.
Citing data released by the Statistics Department Malaysia (DoSM) on Thursday, MIDF Research said August 2024’s PPI was the slowest increase in six months.
“The moderation can be explained by lower commodity prices, particularly Brent crude oil price which dropped 7.3 per cent y-o-y to US$78.88 per barrel,” it said.
Source: BERNAMA News Agency