KUALA LUMPUR: Bank Negara Malaysia’s Monetary Policy Committee (MPC) has maintained the country’s benchmark Overnight Policy Tate (OPR) at 3.2 per cent during its meeting earlier today.
This is very much in line with economists and analysts’ expectations.
In a statement, Bank Negara noted that the degree of monetary accommodativeness was consistent with the intended policy stance at the current level of the OPR.
It noted that it would continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation.
The central bank said the local economy was expected to remain on a “steady growth path”.
It noted that the country’s sound financial sector and improving current account surplus of the balance of payments would also continue to support Malaysia’s fundamentals.
The economy steadily expanded in the first half, despite overhang uncertainties such as the implications of the 14th General Election in May.
Additional impetus from net exports is also expected to further empower private sector activity.
As is, domestic financial markets have remained resilient despite non-resident portfolio outflows.
Bank Negara expects headline inflation this year to be lower than earlier forecast. This was after considering the impact of recent policy measures on domestic cost factors.
“The impact of these measures on inflation, however, is transitory. Headline inflation is likely to turn negative in some months and remain low in the first half of 2019 before trending upwards as these transitory effects lapse. Core inflation is nevertheless expected to remain relatively stable in line with sustained domestic demand,” it said.
On the ringgit, Bank Negara said the currency was right now hindered by external votilities.
The ringgit would reflect its true fundamentals when the external and domestic uncertainties recede, it added.