Malaysia’s c. bank keeps interest rate unchanged

Bank Negara Malaysia (BNM) maintained its benchmark Overnight Policy Rate (OPR) at three per cent on Thursday, expressing optimism about the country’s growth, inflation, and currency outlook.

The Malaysian economy grew by 5.1 per cent in the first half of 2024, driven by strong domestic expenditure and higher export activity.

The Monetary Policy Committee (MPC) expects continued growth in exports, supported by the global tech upcycle and strength in non-E&E goods. Tourism spending and investment activity are also projected to remain robust.

Headline and core inflation averaged 1.8 per cent in the first half of 2024. The MPC expects inflation to remain within its projected range for the year and is unlikely to exceed three per cent. However, the inflation outlook remains subject to domestic policy measures and global developments.

The recent recovery in the ringgit is attributed to expectations of lower interest rates in major economies, particularly the US, and Malaysia’s strong economic performance. The MPC believes that Malaysia’s positive economic prospects and ongoing reforms will continue to support the ringgit.

The MPC believes that the current OPR level is supportive of the economy and consistent with its assessment of inflation and growth prospects. It will remain vigilant to ongoing developments to inform its future monetary policy decisions.

Attribution: Bank Negara Malaysia report

Subediting: M. S. Salama