skyline at night in Malaysia

Malaysia Monetary Policy January 2019

Malaysia: BNM leaves policy rate unchanged in January

At its 24 January meeting, the Monetary Committee of Bank Negara Malaysia left the overnight policy rate unchanged at 3.25%, where it has been since January last year. The decision met market expectations and came against a background of muted inflation in “the absence of strong demand pressures”.

The Committee noted that core inflation, which excludes volatile items such as oil, is unlike to rise at a robust pace. Although the Bank expects headline inflation to average above last year’s reading in 2019, the outlook is subject to downside risks and hinges on oil price movements. Oil prices are expected to remain at a low level this year and the effects of the change to consumption tax late last year will fade throughout the course of this year. Our panelists expect domestic demand to prop up inflationary pressures this year and the Bank expects it to be the key driver of economic growth this year.

Looking ahead, the majority of the FocusEconomics Consensus Forecast panel expect the Bank Negara Malaysia to stand pat this year, leaving the overnight policy rate unaltered owing to mountain downside risks to the economic outlook. These risks, which are chiefly exogenous, stem from a possible intensification in the Sino-American trade conflict after the truce ends in early March and commodity-related shocks. Moreover, the Bank struck a similar tone in the accompanying press release compared to the prior meeting, noting that it will continue monitoring risks to the outlook and future developments to ensure the underlying fundamentals of the economy remain solid and supportive of growth.

The next monetary policy meeting is scheduled for 5 March.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest