Pause in Malaysian Monetary Policy Continued

November 8, 2012

Bank Negara Malaysia’s overnight interest rate was lifted by 25 basis points each in March 2010, May 2010, July 2010 and May 2011, but it has stayed at 3.0% ever since.  A statement released after today’s last of six scheduled meetings in 2012 declared that “while inflation may increase in 2013, it is expected to remain modest given the excess capacity in the economy.  Global energy and commodity prices are also likely to be contained given the weak global conditions.”  Tame inflation prospects enable officials to retain an accommodative stance while watching domestic and global information for any sign of rising price pressure.  Slow global growth amid considerable uncertainty has continued, and Malaysia is relying on healthy domestic demand to offset weak export demand.  Malaysia’s low interest rates are intended to support growth.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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