Malaysia: Central Bank keeps rates on hold
January 31, 2013
At its 31 January monetary policy meeting, the Central Bank left the Overnight Policy Rate (OPR) unchanged at 3.00%, in a move that was widely expected by the market. The Bank has maintained its policy rate at the current level since May 2011. Bank Negara Malaysia noted that the global economy is showing signs of improvement but that fiscal consolidation and weak labor market conditions continue to drag on consumption. Regarding the external environment, the Bank pointed that Asian economies continue to grow on the back of strong domestic demand. On the Malaysian economy, the Bank foresees domestic demand to steam ahead and the external sector to improve gradually. Regarding prices, the Committee expects inflation to remain contained, as modest growth offsets short-term inflationary pressures.