Interest Rate in Malaysia
Malaysia - Interest Rate
BNM holds policy rate in July at 3.00%
The Monetary Policy Committee (MPC) of Bank Negara Malaysia (BMN) kept the overnight policy rate unchanged at 3.00% at its 9 July meeting, as had been expected by market analysts, after cutting rates at the previous meeting in May.
The decision to stand pat was likely motivated by a desire to judge the impact of recent easing before making any further moves. Moreover, the Bank expects a pick-up in inflationary pressures going forward as the effect of last year’s zero-rating of the VAT fades, while growth remains pillared by strong domestic demand conditions notwithstanding moderating global growth and trade tensions. The Bank reiterated that its current monetary policy stance was accommodative and supporting the economy.
In its communiqué, BNM gave no explicit guidance as to the future direction of monetary policy. Most of our panelists see rates staying at their current level for the rest of the year, although some panelists are forecasting a cut.
This is the case for Euben Paracuelles, an analyst at Nomura, who noted:
“We continue to expect another 25bp policy rate cut by BNM to 2.75%, most likely to be delivered at BNM’s September meeting. With inflation likely to remain subdued, we believe BNM has scope to respond to a worse-than-expected growth downturn at a time when fiscal policy is more constrained.”
The next monetary policy meeting is scheduled for 12 September.
Last month, FocusEconomics panelists expected the overnight policy rate to end 2019 at 2.94% and 2020 at 2.98%. A new report is scheduled to be published on 16 July.
Malaysia - Interest Rate Data
| 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|
| Policy Interest Rate (%) | 3.00 | 3.25 | 3.25 | 3.00 | 3.00 |
Malaysia Interest Rate Chart
Source: Malaysia Central Bank.
Malaysia Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 3.60 | 0.15 % | Jul 31 |
| Exchange Rate | 4.13 | 0.0 % | Jul 31 |
| Stock Market | 1,635 | -0.29 % | Jul 31 |
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Economic News
Malaysia: Economic growth accelerates in Q2, surpassing market expectations
August 16, 2019
The economy expanded 4.9% in annual terms in the second quarter, up from the first quarter’s 4.5% year-on-year acceleration and above market expectations of a 4.8% expansion.
Malaysia: Inflation ticks down in July
August 14, 2019
Consumer prices picked up 0.1% month-on-month in July, slightly higher than June’s stable reading, driven by higher prices for food and non-alcoholic beverages, and transport.
Malaysia: Industrial output growth ticks down in June
August 9, 2019
Industrial output increased 3.9% year-on-year in June, down slightly from May’s 4.0% increase and missing analysts’ expectations of a 4.1% rise.
Malaysia: Exports post a sharper contraction in June in USD terms
August 2, 2019
Exports plunged 7.3% year-on-year in June in USD terms, worse than May’s 2.9% decline.
Malaysia: Manufacturing PMI largely unchanged in July
August 1, 2019
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit and Nikkei, was virtually unchanged at 47.6 in July (June: 47.8).
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