Malaysia holds rates steady at 3.0% – BNM

Malaysia’s central bank, Bank Negara Malaysia (BNM) has kept its benchmark interest rate unchanged at 3.0 per cent, according to its statement on Thursday.

The decision came as the BNM balances concerns about potential inflation risks with ongoing efforts to stabilise the Malaysian Ringgit (MYR).

The global economy continues to expand, though headwinds are emerging. While positive labour market conditions and moderating inflation point to sustained growth, tighter monetary policy and reduced fiscal support could act as brakes.

The global tech upcycle offers a bright spot, with global trade expected to strengthen further. However, the prospect of sustained high interest rates, particularly in the US, remains a concern.

Inflation remained subdued in the first quarter of 2024, averaging 1.7 per cent and 1.8 per cent for headline and core inflation, respectively.

This trend is expected to continue throughout the year, influenced by stable demand and contained cost pressures.

However, the implementation of domestic policies on subsidies and price controls, alongside global commodity price fluctuations and financial market developments, could impact the outlook.

BNM estimates inflation to fall within a range of 2.0 – 3.5 per cent for headline and 2.0 – 3.0 per cent for core inflation in 2024.