Financial News: Malaysia Central Bank Holds Key Interest Rate Steady

Malaysia Central Bank Holds Key Interest Rate Steady At 3%

01/22/2025 - 07:35:00 (RTTNews)

(RTTNews) - Malaysia's central bank left its benchmark interest rate unchanged on Wednesday as policymakers expect the economy to sustain growth and inflation to remain manageable.

The Monetary Policy Committee of Bank Negara Malaysia, led by Governor Abdul Rasheed Ghaffour decided to maintain the Overnight Policy Rate at 3 percent, as widely expected.

The previous change in the interest rate was in May 2023, when it was raised by 25 basis points.

"At the current OPR level, the monetary policy stance remains supportive of the economy and is consistent with the current assessment of inflation and growth prospects," the bank said.

BNM policymakers said the strength in economic activity is likely to be sustained in 2025, driven by resilient domestic expenditure. At the same time, inflation is expected to remain manageable, amid the easing global cost conditions and the absence of excessive domestic demand pressures.

Although the currency performance continues to be primarily driven by external factors, Malaysia's favorable economic prospects and domestic structural reforms, complemented by ongoing initiatives to encourage flows, will continue to provide enduring support to the ringgit, the committee noted.

Capital Economics economist Gareth Leather does not expect any changes to the policy rate in 2025. Meanwhile, central banks elsewhere are likely to cut rates steadily over the coming months, the economist added.

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