Central Bank of Malaysia keeps interest rates at historic low

KUALA LUMPUR (CNA) – Malaysia’s central bank kept its benchmark interest rate at a record high yesterday, in line with expectations, as the country’s economic recovery gains momentum.

A poll by the news agency showed that 19 economists surveyed expected Bank Negara Malaysia (BNM) to keep its key overnight rate at 1.75%, although some forecast a rate hike in the near future. third trimester.

Despite a recent moderation in economic activity due to Omicron-induced COVID-19 resurgences, the overall global economic recovery trajectory remains on track, the central bank said in a statement.

Malaysia’s economy returned to growth in the October-December quarter, growing 3.6% year on year, with the central bank expecting the rebound to continue this year despite downside risks. new disruptions caused by the coronavirus pandemic.

But the war in Ukraine adds new uncertainty.

Bank Negara said developments surrounding the conflict in Ukraine emerged as a major risk to global growth and business prospects, commodity prices and financial market conditions.

“Risks to the growth outlook remain on the downside due to external and domestic factors. These include weaker than expected global growth, ongoing geopolitical conflicts, worsening supply chain disruptions and developments surrounding COVID-19,” he said, adding that the stance of its monetary policy will continue to be determined by new data and their implications for the whole. domestic inflation and growth outlook.

The entrance to Bank Negara Malaysia in Kuala Lumpur. PHOTO: ANC

Stephen V. Lee