Thailand
Malaysia keeps key rate unchanged amid low inflation
KUALA LUMPUR: Malaysia’s central bank kept its benchmark interest rate unchanged on Tuesday, saying inflation is likely to remain low after the economy slipped into deflation in January.
The central bank kept its overnight policy rate at 3.25%, in line with the forecasts of all 22 economists surveyed by Bloomberg. Bank Negara Malaysia has left the rate on hold since raising basis points in January 2018.
“In the immediate term, inflation is expected to remain low mainly due to policy measures,” the central bank said. “Recognizing that there are downside risks in the economic and financial environment, the monetary policy committee will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation.”
Key Insights
Consumer prices dropped 0.7% in January from a year earlier — the first decline since the aftermath of the global financial crisis in 2009 — as fuel costs fell
Analysts at Deutsche Bank AG and Nomura Holdings Inc predict lower interest rates this year, while the majority in a Bloomberg survey still see policymakers staying on hold through 2019.
Economists expect the government to miss its 4.9% growth goal in 2019, predicting 4.5% instead, as global risks mount. While exports continue to hold up in Malaysia, purchasing managers surveys signal a downturn.
The budget deficit remains a constraint on the economy, but the government is almost done with its review of projects and spending cuts, which means it may raise expenditure.
Source: https://www.bangkokpost.com/business/world/1639602/malaysia-keeps-key-rate-unchanged-amid-low-inflation