MALAYSIA’S central bank kept its benchmark interest rate unchanged on Thursday (Mar 6), as expected, saying monetary policy was supportive of the economy and consistent with the outlook for inflation and growth.
Bank Negara Malaysia maintained its overnight policy rate at 3 per cent, where it has been since May 2023, in line with market expectations the central bank will stand pat on rates until at least the end of 2025.
“Despite external uncertainties, the strength in economic activity is expected to be sustained in 2025, anchored by domestic demand,” the central bank said in a statement.
Regional peers, such as Bank Indonesia, the Bank of Thailand, and the Philippine central bank, have cut rates to support sluggish growth.
Malaysia’s government and central bank have forecast the economy to expand between 4.5 per cent and 5.5 per cent in 2025, following 5.1 per cent growth in 2024.
“However, the outlook for global growth, inflation and trade is subject to considerable uncertainties surrounding tariff and other policies from major economies and geopolitical developments,” the central bank said.
It expects Malaysia’s inflation rate to remain manageable in 2025 amid easing global cost conditions and the absence of excessive domestic demand pressures. Headline and core inflation stood at 1.7 per cent and 1.8 per cent respectively in January, the bank added.
While financial markets could experience heightened bouts of volatility due to global uncertainties, the central bank said a favourable domestic outlook and structural reforms would help support the ringgit currency. REUTERS
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