BANK Negara’s sixth monetary policy meeting will take centre stage this week.

       The Monetary Policy Committee (MPC) meeting is scheduled for Wednesday, with most economists expecting the central bank to maintain the overnight policy rate (OPR) at 1.75%.

       UOB Global Economics and Markets Research projects the OPR to remain unchanged until mid-2022, and thereafter it will be raised by 25 basis points to 2.00% in the second half of 2022.

       Kenanga Research said Bank Negara is likely to keep the OPR unchanged at 1.75% in the next six to nine months.

       As Malaysia prepares to shift from the pandemic to endemic phase of Covid-19, helped by the country’s high Covid-19 vaccination rates, the central bank is expected to hold the OPR at 1.75% until at least the second quarter of 2022 to support a steady growth path for the economy, according to Kenanga.

       However, it said despite a positive economic outlook, Bank Negara’s decision on the OPR remains subject to the pace of labour market recovery, the trajectory of headline inflation, domestic Covid-19 situation post-reopening and further progress on the National Recovery Plan.

       Socio-Economic Research Centre expects Bank Negara to keep the OPR at 1.75% until mid-2022 to support a firmer revival in domestic demand.

       It said the continued low interest rate complements the targeted fiscal support to secure a sustainable recovery path.

       The overall economic growth and inflation outlook, as well as financial stability risk, will be carefully assessed in a balancing act to time the starting of interest rate normalisation.

       It added that the uncertainty of the monetary path in some advanced economies and potential induced financial volatility in the financial and foreign exchange markets will also be one of the key aspects under the central bank’s monetary management.

       AmBank Research is maintaining its inflation projection at 2.6%-2.8%, with no change to the OPR outlook of 1.75%.

       Meanwhile, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) for October 2021 is expected to be announced today.

       Bursa Malaysia and its subsidiaries will be closed on Thursday in conjunction with Deepavali.

       PMI readings OCTOBER’S manufacturing and services Purchasing Managers’ Index (PMI) will be released this week.

       ING said the PMI readings could give an indication as to whether the global supply chain bottlenecks are beginning to feed into overall manufacturing activity.

       It added that other economies in Asia could see improved activity after relaxing mobility restrictions.

       IHS Markit said the focus will be on how individual regions fared into the start of the fourth quarter, with a particular focus on Asia, and China in particular, for a steer on global supply.

       GDP results HONG KONG and Indonesia are expected to release their third-quarter GDP results this week.

       Bloomberg estimates Hong Kong to post a 5.7% growth year-on-year from a 7.6% expansion in the second quarter.

       ING said Indonesia is forecast to post a 3.5% year-on-year expansion, a slowdown from the previous quarter, after surging Covid-19 cases prompted authorities to heighten mobility curbs during the quarter.