Malaysia Monetary Policy July 2017

Malaysia

Malaysia: BNM maintains its policy rate unchanged in July

July 13, 2017

Bank Negara Malaysia (BNM) decided to keep the Overnight Policy Rate unchanged at 3.00% at its 13 July monetary policy meeting, as widely expected by market analysts. The Bank has held the rate unchanged since July 2016.

Despite growing optimism about the Malaysian economy, BNM decided to keep monetary policy unchanged, citing that a degree of accommodation is still needed. While Q1 GDP surprised on the upside, volatility in commodity prices and geopolitical risks are still weighing on the country’s growth outlook. Regarding price pressures, the Bank sees inflation moderating in the second half of the year.

Bank Negara highlighted that their current policy stance is accommodative and supportive of the economy. The entire panel of analysts participating in FocusEconomics’ Consensus Forecast expect the Bank to keep rates unchanged this year. In 2018, the majority of panelists see the Bank continuing to hold the policy rate unchanged, with the Consensus at 3.13%.


Author: Angela Bouzanis, Senior Economist

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Malaysia Monetary Policy July 2017 1

Note: Overnight Policy Rate in %.
Source: Bank Negara Malaysia (BNM).


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