Malaysia Maintains Its Key Rate Despite Inflation

Malaysia’s benchmark interest rate remained unchanged on Thursday as the Southeast Asian nation tries to maintain economic growth after months of lower exports and inflation.

According to predictions made by all 21 analysts in a Bloomberg survey, Bank Negara Malaysia held the overnight policy rate at 3% for the second meeting in a row. One more meeting is scheduled for the year for the monetary policy committee.

In a statement released on Thursday, the Central Bank stated that the rate-setting panel will ensure that the monetary policy stance remains favorable to sustainable economic growth and price stability.

According to BNM, the primary growth drivers will be increased domestic demand and increased tourism activity, which will mitigate the impact of slower exports on the economy of the nation. The outlook may be impacted by slower-than-anticipated global growth, it added.

BNM said on Thursday that there are still risks to Malaysia’s inflation outlook, mostly from changes in domestic policy regarding subsidies and price controls, global commodity prices, and developments in the financial market.