Malaysia kept its benchmark interest rate unchanged yet again on Thursday, as the Southeast Asian country looks to sustain economic growth following months of slowing inflation and exports.
(Bloomberg) — Malaysia kept its benchmark interest rate unchanged yet again on Thursday, as the Southeast Asian country looks to sustain economic growth following months of slowing inflation and exports.
Bank Negara Malaysia maintained the Overnight Policy Rate at 3% for a second straight meeting, as forecast by all 21 analysts in a Bloomberg survey. The monetary policy committee has one remaining meeting scheduled for the year.
The decision affirms Malaysia’s pro-growth stance after its success in taming inflation over the past year via rate hikes as well as government policies on living costs. Price pressures in July dipped to levels not seen in nearly two years, allowing the central bank to focus on shielding the trade-reliant economy from the brunt of the global slowdown.
The rate-setting panel will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability, the central bank said in a statement Thursday.
Domestic demand and stronger tourism activity will be the key growth drivers, according to BNM, cushioning the impact of slowing exports to the country’s economy. Weaker-than-expected global growth could weigh on the outlook, it added.
Central bank Governor Abdul Rasheed Ghaffour last month said the economy would likely expand closer to the lower band of the central bank’s 4% to 5% forecast range this year, after growth came in below expectations in the second quarter.
Malaysia’s inflation outlook remains subject to risks, mainly stemming from changes to domestic policy on subsidies and price controls, global commodity prices and financial market developments, BNM said on Thursday.
–With assistance from Tomoko Sato and Cecilia Yap.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.