Following today’s monetary policy committee (MPC) meeting, Bank Negara Malaysia (BNM) has decided to maintain the overnight policy rate (OPR) at 3%. This is the same rate set earlier in May this year when BNM increased the OPR by 0.25%. Prior to that, the OPR was pegged at 2.75% twice in January and March.

“At the current OPR level, the monetary policy stance is slightly accommodative and remains supportive of the economy. The MPC continues to see limited risks of future financial imbalances,” the central bank said in a release.

Car loans are affected by the OPR, with higher rates resulting in hire purchase loans becoming more expensive and potentially harder to gain approval. This has an impact on car sales, with the Malaysian Automotive Association (MAA) saying in January it expects total industry volume in 2023 to decline after a record 2022.

BNM also noted that headline inflation has continued to ease amid lower cost factors. “While core inflation has also moderated, it remains elevated relative to the long-term average amid lingering demand and cost factors,” it added.