In an expected move, Bank Negara Malaysia (BNM) chose to keep the overnight policy rate (OPR) at 3% at the close of the Monetary Policy Committee (MPC) meeting today.
In a statement, the central bank said the current level of OPR, monetary policy stance remains supportive of the economy and is consistent with the current assessment of inflation and growth prospects.
The MPC remains alert to ongoing developments in informing its assessment of the domestic inflation and growth outlook.
They will also ensure that the stance of monetary policy remains conducive to sustainable economic growth amid price stability.
For the Malaysian economy, the latest data shows higher economic activity in the first quarter of 2024 driven by resilient domestic spending and a positive recovery in exports.
Looking ahead, the recovery in exports is expected to maintain momentum supported by the global technology upcycle as well as continued strength in non-electrical and electronic goods.
In addition, tourist arrivals and spending also helped the increase and employment data continued and wage growth remained supportive of household spending.
BNM said investment activities will continue to be supported by continued progress in private and public projects, the implementation of catalytic initiatives under the national master plan as well as higher approved investments.
The growth outlook is subject to downside risks from weaker-than-expected external demand and a decline in commodity production.
Headline and core inflation averaged 1.7% and 1.8% respectively for the first quarter of 2024.
Looking ahead, inflation in 2024 is expected to remain moderate reflecting stable demand conditions and controlled cost pressures.
The outlook for the rest of the year depends on the implementation of domestic policies on subsidies and price controls, as well as global commodity prices and financial market developments.
