Interest Rate in Malaysia

Malaysia Interest Rate | Economic News & Forecasts

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  

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Malaysia Interest Rate Chart


Malaysia Interest Rate
Note: Overnight Policy Rate in %.
Source: Malaysia Central Bank.

Malaysia Facts

ValueChangeDate
Bond Yield3.600.15 %Jul 31
Exchange Rate4.130.0 %Jul 31
Stock Market1,635-0.29 %Jul 31

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