skyline at night in Malaysia

Malaysia Monetary Policy September 2018

Malaysia: BNM stands pat in September

At its 5 September meeting, the Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) opted to leave the overnight policy rate (OPR) unchanged at 3.25%, where it has been since January. The decision was in line with market expectations.

Although solid private consumption and export growth are driving the economy, the decision was justified on the basis that inflationary pressures are subdued, especially since the government zero-rated the goods and services tax on 1 June. It was therefore premature to continue raising rates. On the other hand, given that there should be an intensification of inflationary pressures following the sales and services tax which was reinstated on 1 September, and that core inflation should remain fairly stable, the Bank saw no need to cut rates either.

The accompanying statement’s tone was largely unchanged from the last meeting. The Bank expects the economy to continue to be driven by private consumption and net exports, and for headline inflation to gradually rise going forward, in line with FocusEconomics panelists’ projections. FocusEconomics Consensus Forecast panelists largely do not expect a rate hike this year, although most see at least one hike by the end of 2019.

The next monetary policy meeting is scheduled for 8 November.

Malaysia Interest Rate Forecast

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