KUALA LUMPUR: Bank Negara Malaysia (BNM) kept the overnight policy rate (OPR) unchanged at 3.25% on Thursday and cautioned that downside risks to growth remain high.
The central bank said at its monetary policy committee (MPC) meeting, the view was that the economy would expand between 4.5% and 5.5% this year and 4% to 5% in 2016.
“It is, however, recognised that the downside risks to growth remain high,” it said.
BNM said at the current level of the OPR, the stance of monetary policy remained accommodative and supportive of economic activity.
“The MPC recognised there are heightened risks in the global economic and financial environment.
“These risks are being carefully monitored to assess their implications on macroeconomic stability and the prospects of the Malaysian economy. This is to ensure that the monetary policy stance is consistent with the sustainability of the overall growth prospects,” it said.
BNM said headline inflation averaged at 2.8% in August and September, and “is expected to remain relatively stable for the rest of 2015”.
Despite the weaker ringgit exchange rate, the impact on overall inflation has been limited by the lower commodity prices and the generally low global inflation.
“For 2016, headline inflation is expected to be higher, to peak in the first quarter and moderating thereafter,” it said.
BNM said global and domestic developments have continued to affect the ringgit exchange rate and domestic financial markets.
It added domestic liquidity continues to be sufficient and the financial system remained sound with healthy growth in financing.
“Financial intermediation has therefore continued to support the economy. BNM will continue to ensure the orderly functioning of the money and foreign exchange markets,” it said.
Source: http://www.thestar.com.my/Business/Business-News/2015/11/05/Bank-Negara-keeps-OPR-unch/?style=biz
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