Financial News: Malaysia Central Bank Holds Key Rate

Malaysia Central Bank Holds Key Rate

05/09/2024 - 06:57:00 (RTTNews)

(RTTNews) - Malaysia's central bank left its benchmark rate unchanged as widely expected on Thursday. The Monetary Policy Committee of Bank Negara Malaysia headed by Datuk Abdul Rasheed Ghaffour decided to retain the Overnight Policy Rate at 3.00 percent.

The bank had changed the rate last 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 the inflation and growth prospects," the bank said.

After incorporating the potential impact of subsidy rationalization, headline and core inflation are projected to average between 2.0 percent - 3.5 percent and 2.0 percent - 3.0 percent, respectively.

The bank forecast inflation to remain moderate in 2024, broadly reflecting stable demand conditions and contained cost pressures.

The bank observed that ringgit does not reflect Malaysia's economic fundamentals and growth prospects.

The tone of the statement supports the view that rates will remain on hold throughout this year, Capital Economics' economist Ankita Amajuri said.

The economist said the depreciation of the currency against the US dollar is a concern for the central bank but it is unlikely to follow Bank Indonesia and hike rates to support the currency.

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