Bank Negara Malaysia Stance Left Unchanged
March 9, 2016
A released statement after the latest meeting of Malaysia’s Monetary Policy Committee made the following points:
- The 3.25% overnight policy interest rate and 3.5% reserve ratio requirement were left as is. The interest rate has been at 3.25% since a 25-basis point cut in July 2014. Four earlier reductions totaling one percentage point were implemented between March 2010 and May 2011.
- “The stance of monetary policy is accommodative and supportive of economic activity. The MPC recognises that there are heightened risks in the global economic and financial environment and is closely monitoring and assessing their implications on domestic price stability and growth. This is to ensure that the monetary policy stance is consistent with sustainable growth of the Malaysian economy.”
- In 2016, “the inflation momentum is expected to be slower than earlier anticipated” but above that in 2015.
- Domestic demand will lead economic growth this year. Growth will be somewhat softer than last year’s trend.
- “while global growth is expected to continue, the outlook is vulnerable to downside risks arising from the prevailing fragilities that are both cyclical and structural, excessive leverage, the sharp declines in commodity prices and the rising geopolitical risks.”
Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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