Malaysia’s central bank left its key interest rate unchanged, as widely expected, on Wednesday.
The Monetary Policy Committee of Bank Negara Malaysia decided to maintain the Overnight Policy Rate at 3.25 percent.
The committee observed that the degree of monetary accommodativeness is consistent with the intended policy stance. “The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation,” the bank said in a statement.
The Malaysian economy is expected to remain on a steady growth path driven by both domestic and external demand, the bank said.
The bank noted that the economy continued to expand in the first half of 2018, underpinned by private sector activity with additional impetus from net exports.
Headline inflation is forecast to be lower than earlier forecast due to the impact of recent policy measures on domestic cost factors. However, the impact of these measures on inflation is transitory.
Further, the bank said headline inflation is likely to turn negative in some months and remain low in the first half of 2019. At the same time, core inflation is expected to remain relatively stable in line with sustained domestic demand.