Manulife Investment Management officials say Bank Negara Malaysia (BNM) should be more aggressive with its monetary policy tightening based on the still low inflation rate.
Through Manulife's 4th quarter investment review event, Luke Browne who holds the position of head of asset allocation expressed his desire to see Malaysia's overnight policy rate (OPR) raised aggressively.
He explained, based on the context of the current situation where Malaysia's inflation is still the lowest compared to other countries, then the best decision is to increase the OPR at an aggressive rate.
Also supportive was Sue Trinh, head of macro strategy, saying Malaysia's moderate inflation situation helped BNM avoid aggressive monetary policy and the opening of borders also supported economic recovery.
For the record, Malaysia's inflation rate based on the consumer price index (CPI) has increased 4.4% year-on-year to 127.9 in July 2022 compared to 122.5 during the same period last year.
As a result, the OPR was increased by 25 basis points to 2.50% in the Monetary Policy Committee meeting on 8 September.
In the meantime, Trinh also commented on the risks that could affect Malaysia's economic growth.
According to him, domestic political uncertainty can be a major threat to the implementation of fiscal policy in support of growth.
In addition, Malaysia is also exposed to the potential of a global economic recession based on the inflationary tension situation in the world such as the United States (US), China and Europe.
