BNM decided recently to maintain the Overnight Policy Rate (OPR) at its Monetary Policy Committee meeting.

The central bank said the liquidity in Malaysia’s banking system remains sufficient, with financial institutions continuing to operate with strong capital and liquidity buffers.

The growth of financing to the private sector is also consistent with the pace of economic activity.

For next week, BNM is expected to continue the intervention with daily tenders to mop up excess funds in the market, and the US Federal Reserve System’s (Fed) imminent rate hike will not have much effect on the local market, a dealer said.

“The market has priced in a definite hike in the Fed’s funds target range to 0.75-1.00 per cent next week,” she added.

For the week just ended, BNM intervened daily to flush the system of surplus funds by conducting conventional, Qard, repo and range maturity auction tenders.

On Friday, the central bank’s action helped reduce the market’s total liquidity surplus to RM28.03 billion in the conventional system and RM6.76 billion in Islamic funds.

With the OPR remaining unchanged, rates were holding steady with the benchmark three-month interbank rate standing at 3.43%.

Meanwhile, the overnight Islamic reference rate stood at 2.95% and the one-week, two and three-week rates stood at 3.02%, 3.06% and 3.11% respectively.