KUALA LUMPUR, May 14 — Short-term interest rates are expected to remain stable next week with Bank Negara Malaysia (BNM) continuing to intervene to stabilise the money market.

Short-tenured interbank rates would remain stable with the central bank expected to continue the intervention with daily tenders to mop up excess funds in the market, a money dealer said.

"The central bank would likely continue to conduct conventional and Islamic instruments. "This will include conventional money market tenders, repo tenders, range-maturity auctions both conventional and Islamic, and commodity murabahah programme money market tenders, to mop up the excess liquidity," she told Bernama.

Meanwhile, when announcing the Gross Domestic Product (GDP) data for the first quarter on Friday, BNM said that at the Overnight Policy Rate (OPR) prevailing rate of 3.25 per cent, Malaysia's monetary conditions remain supportive of economic activity. For the week just ended, BNM had intervened daily to flush the system of surplus funds.

Yesterday, the central bank's action helped reduce the market's total liquidity surplus to RM26.04 billion in the conventional system and RM3.48 billion in Islamic funds. The overnight Islamic reference rate stood at 3.20 per cent while the one-, two- and three-week rates stood at 3.31 per cent, 3.35 per cent and 3.40 per cent respectively throughout the week.

On a week-to-week basis, the benchmark three-month KLIBOR inched down to 3.67 per cent from last week's 3.68 per cent. — Bernama