KUALA LUMPUR, Nov 3 — Malaysia's central bank is expected to keep its overnight policy rate steady at 3.25 per cent on Thursday as the economy and currency remain under pressure from weak commodity prices and political uncertainties, a Reuters poll showed.
All 15 economists surveyed forecast that Bank Negara Malaysia (BNM) would leave the rate unchanged in its last policy meeting of the year, with economic growth expected to slow further in 2016.
“We do not think BNM is ready to hike policy rates to defend the ringgit, given the risk to GDP growth and asset prices,” said Bank of America Merrill Lynch in its research note.
The ringgit has lost over 18 per cent so far this year and is emerging Asia's worst performing currency. It has hit 17-year lows and was trading at 4.2800 this morning.
Malaysia's economy has been pressured by the plunging ringgit, the global slide in commodity prices and a slowdown in China, Malaysia's biggest trading partner.
Investors have also been rattled by allegations of corruption swirling around Prime Minister Najib Razak over 1Malaysia Development Bhd (1MDB), the indebted state fund whose advisory board he chairs. Najib has denied receiving money from 1MDB or any state enterprise but his opponents are demanding he step down. — Reuters
