Malaysia's central bank again maintains overnight interest rate at 3%

By Tali David

Minneapolis, Sept. 6 - The Monetary Policy Committee of Bank Negara Malaysia, Malaysia's central bank, announced that it has kept its overnight policy rate unchanged at 3%. The same decision was made in July.

The committee said the global growth momentum has moderated. Economic activity in most major advanced economies is slower amid greater policy uncertainty, while conditions in the international financial markets continue to be volatile.

In emerging economies including in Asia, domestic demand is showing signs of moderation amid sustained weakness in external activity.

The group said that while the Malaysian economy is affected by these global developments, domestic demand has continued to support economic growth. Looking ahead, this trend is expected to continue.

Headline inflation is expected to remain moderate for the remainder of 2012 and into 2013.

With some excess capacity in the economy, domestic demand is not expected to result in inflationary conditions. the committee said.

Global energy and commodity prices are likely to be contained given the weak global conditions. However, upside risks to inflation could emerge should supply disruptions result in higher global prices for commodities, the committee added.

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