Thailand
Malaysia: 3% Malaysia’s benchmark rate unchanged as currency faces pressure
KUALA LUMPUR • Malaysia’s central bank kept its benchmark interest rate unchanged for a third straight meeting to help bolster the currency as policymakers in emerging economies gird themselves for tighter United States monetary policy.
Bank Negara Malaysia held its key rate at 3 per cent, it said in a statement yesterday.
The ringgit has depreciated about 6 per cent against the US dollar since Mr Donald Trump’s surprise win in the US election – the worst hit among Asian emerging markets – prompting Bank Negara to take steps to restrict some offshore foreign-exchange trading to curb the currency’s slide.
The measures have helped provide stability in the ringgit, though “uncertainties in the global economy, the policy environment and geopolitical developments may, however, result in bouts of volatility in the regional financial and foreign exchange markets”, the bank said.
With more Fed rate increases to come this year, the door for further policy easing in Asia may have closed.
Said Ms Trinh Nguyen, senior economist for investment bank Natixis based in Hong Kong: “As Malaysia has high exposure to foreign portfolio investment, especially in fixed income, it was a wise move to hold and watch how external conditions unfold.”
The economy is projected to grow 4 per cent to 5 per cent this year, while inflation is forecast to average between 2 per cent and 3 per cent this year. Consumer prices rose 1.8 per cent last month from a year ago.
The central bank said inflation will probably average higher this year than the 2.1 per cent reached last year. The economy remains on track to expand as projected, it said.
BLOOMBERG, REUTERS
Source: http://www.straitstimes.com/business/3-malaysias-benchmark-rate-unchanged-as-currency-faces-pressure