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d) Based on The Edge (2021), Bank Negara Malaysia (BNM) maintained the Overnight Policy Rate (OPR) at 1.75% today as it expects Malaysia's economic growth
d) Based on The Edge (2021), Bank Negara Malaysia (BNM) maintained the Overnight Policy Rate (OPR) at 1.75% today as it expects Malaysia's economic growth to improve although it is still subject to downside risks. Supported by steady improvements in manufacturing and trade activity, global economic recovery seems to be gaining its momentum. Meanwhile, the headline inflation in 2021 is projected to average higher, primarily due to an increase in global oil prices. If the global oil prices keep increasing and are expected to surge throughout the year from your opinion, should BNM maintain its target OPR to curb inflation? How does such decision affects the economic growth of Malaysia? Provide some policy recommendations that may enhance the economic performance of the country if this situation happens. (7 marks) d) Based on The Edge (2021), Bank Negara Malaysia (BNM) maintained the Overnight Policy Rate (OPR) at 1.75% today as it expects Malaysia's economic growth to improve although it is still subject to downside risks. Supported by steady improvements in manufacturing and trade activity, global economic recovery seems to be gaining its momentum. Meanwhile, the headline inflation in 2021 is projected to average higher, primarily due to an increase in global oil prices. If the global oil prices keep increasing and are expected to surge throughout the year from your opinion, should BNM maintain its target OPR to curb inflation? How does such decision affects the economic growth of Malaysia? Provide some policy recommendations that may enhance the economic performance of the country if this situation happens. (7 marks)
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