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Monetary Policy Meeting


The term 'monetary policy' refers to the actions undertaken by a central bank, such as the Bank Negara Malaysia (BNM), to influence the availability and cost of money and credit to help promote national economic goals. The BNM Act of 1958 gave the BNM responsibility for setting monetary policy.

The BNM controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the BNM is responsible for the discount rate and reserve requirements, and the Monetary Policy Committee is responsible for open market operations. Using the three tools, the BNM influences the demand for, and supply of, balances that depository institutions hold at BNM and in this way alters the Overnight Policy Rate (OPR). The OPR is the interest rate at which depository institutions lend balances at the BNM to other depository institutions overnight.

Changes in the OPR trigger a chain of events that affect Base Lending Rate (BLR), short-term interest rates, fixed deposit rate, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services which is the micro and macro factors on the economic.

There will be 2 meetings in each quarter to with the intention to review the current economic of the nation and apply the appropriate instrument and necessary measurement to counter the change. Check on the 2013 Monetary Policy Committee Meeting schedule here.


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