KUALA LUMPUR (Sept 10): Standard Chartered Global Research said the Bank Negara Malaysia (BNM) is unlikely to raise its Overnight Policy Rate (OPR) to support the local currency. 

In a note to clients today, the research house said it expects the central bank to keep the policy rate unchanged at 3.25%. 

"We do not think it (BNM) will hike rates to support the currency," it added. 

The central bank's monetary policy committee will meet tomorrow (Sept 11) to decide the OPR rate going forward. 

The firm pointed out, Malaysia's July inflation surprised to the upside at 3.3% year-on-year (y-o-y), including Goods and Services Tax (GST) implementation in April, while it was only 1.7% in seven months in 2015. 

According to the firm, the central bank sounded slightly more dovish than before in its last meeting statement on July 9, acknowledging risks to global growth. 

"Given continued growth in Malaysia, we expect BNM to maintain its current policy stance," it added. 

Today, the ringgit weakened to a new 17 year low against the US Dollar at 4.3790. At 10.44am, the local note pared losses to value at 4.3463 to a greenback.

Year-to-date, the local currencies has depreciated against the US Dollar by 24.28%

In an MPC meeting in July, BNM had decided to maintain the OPR rate at 3.25%, citing the current rate remained accommodative and supportive of economic activity. 

However, the MPC acknowledged that there are heightened risks to global growth and financial conditions.

"These risks are being carefully monitored to assess their implications on macroeconomic stability and the prospects of the Malaysian economy. 

"This is to ensure that the monetary policy stance is consistent with the sustainability of the overall growth prospects," according to BNM's statement then.