Malaysia holds policy rate at 3¼%; inflation forecast to ‘trend lower’

By Susanna Moon

Chicago, May 19 – Bank Negara Malaysia’s monetary policy committee again decided to maintain the overnight policy rate at 3¼%.

The global economy continues to expand at a more moderate rate, but is likely to be constrained by “structural issues and geopolitical developments,” according to a bank statement.

Meanwhile, inflation was recorded at an average of 3.4% in the first quarter and has been projected to “trend lower” this year as a result of low energy and commodity prices and “the generally subdued global inflation,” the bank said.

At the current rate, the bank’s policy stance accommodates and supports economic activity; however, risks remain to the economic and financial environment, the bank said.

The banks said it is closely monitoring the implications on the country’s price stability and growth, which will keep the monetary policy pegged to sustainable growth.

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