KUALA LUMPUR, March 7 — Bank Negara Malaysia will keep the overnight policy rate at 3.25 per cent, bucking predictions that it would raise this by another 25 basis points.
According to the central bank, its Monetary Policy Committee (MPC) opted to keep the rate unchanged following its meeting today.
“At the current level of the OPR, the degree of monetary accommodativeness is consistent with the policy stance to ensure that the domestic economy continues on a steady growth path amid lower inflation,” it said in a statement.
“The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation.”
BNM raised the OPR by 25 basis points to 3.25 per cent in January, the first such increase since 2014.
Despite that, some economists continued to predict that BNM would raise the interest rate by another .25 percentage points this year.
The central bank was among the first worldwide to hike its interest rate, amid growing concern with global inflation.
The full-year inflation for Malaysia was 3.7 per cent last year, surpassing BNM's projection of 3.4 per cent for 2017.
However, BNM expects this to ease in 2018 based on, among others, the ringgit's recovery against the US dollar.
“Underlying inflation, as measured by core inflation, is also projected to moderate due to improving labour productivity and ongoing investments for capacity expansion,” the central bank said.
