Central Bank of Malaysia: Steady as She Goes

March 5, 2015

The official policy rate of Bank Negara Malaysia has been at 3.25% since a 25-basis point hike last July, which was its first change since four such increases in the 14 months between March 2010 and May 2011.  Real GDP expanded nearly 6% between 4Q13 and 4Q14, CPI inflation is hovering currently around 1%.  A statement released after the monetary policy committee’s latest meeting doesn’t spring any surprises.  To sum, “Going forward, domestic demand will remain as a key driver of growth.  The prospects are for the Malaysian economy to still remain on a steady growth path.  Headline inflation declined in January and is expected to remain low in the first quarter of 2015. For the rest of the year, headline inflation is expected to trend higher, but to be below its historical average.  The stance of monetary policy remains accommodative and supportive of economic activity.”  Officials seem in no hurry to adjust the key interest rate soon, but the probable direction when it comes is upward.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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