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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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