Malaysia’s central bank decided to keep its overnight policy rate (OPR) unchanged at 2.75% on March 9 after a working session of its Monetary Policy Committee (MPC).
In a statement released after the working session, the Bank Negara Malaysia (BNM) said that the MPC remains vigilant to cost factors, including those arising from developments of the financial market that could affect the inflation outlook.
Further normalisation to the degree of monetary policy accommodation would be informed by the evolving conditions and their implications to the domestic inflation and growth outlook, it said.
In the global economy, there were some positive developments with the reopening of China’s economy and better-than-expected growth outturns in major economies, supported by resilient domestic demand.
Nevertheless, the global economy continues to be weighed down by elevated cost pressures and higher interest rates. Headline inflation moderated slightly from high levels in recent months, but core inflation remained above historical averages. Some central banks are expected to continue raising interest rates to manage inflationary pressures. This will continue to pose headwinds to the global growth outlook. The growth outlook remains subject to downside risks, mainly from an escalation of geopolitical tensions, higher-than-anticipated inflation outturns, and a sharp tightening in financial market conditions, it said.
The Malaysian economy expanded strongly, by 8.7% in 2022 driven by the recovery in private and public sector spending following the full reopening of the economy. After the strong performance in 2022, the economy is expected to moderate in 2023 amid a slower global economy, according to the statement.
In January, the BNM surprisingly kept its benchmark rate unchanged at 2.75% after four consecutive upturn adjustments in 2022./.
Source: Vietnam News Agency