Malaysian Monetary Policy Unchanged As Forecast

January 26, 2010

Bank Negara Malaysia retained a 2.0% key interest rate as was expected and released a statement predicts a continuing accommodative monetary policy but balances that goal against the need to avoid a buildup of financial imbalances.  On-year GDP growth was still negative in 3Q09.  Recovery is being promoted by supportive macroeconomic policies, better financial conditions, and brisk demand in other emerging markets, but some downside risks persist.  Consumer price inflation returned to positive ground last month, albeit just 1.1% compared to December 2008, and it will rise no more than gradually.  From a peak of 3.5%, Bank Negara Malaysia’s key rate was initially cut by 25 bps in November 2008, then by 75 bps in January 2009 and 50 bps to the present 2.0% last February 24th.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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