By Ying Xian Wong
Malaysia's central bank held its benchmark interest rate unchanged again, extending its policy pause to a year as it keeps a watchful eye on growth and inflation.
Bank Negara Malaysia kept its overnight policy rate at 3.00% on Thursday. That's the same level as in May last year, when the bank delivered a surprise rate hike, in light of continued economic strength and moderating inflation.
Thursday's decision was expected by all seven economists polled by The Wall Street Journal.
Bank Negara reiterated that its policy stance remains supportive of the economy and gave an upbeat view of Malaysia's economic prospects.
"The latest indicators point towards higher economic activity in the first quarter of 2024, driven by resilient domestic expenditure and a positive turnaround in exports," it said.
Bank Negara expects the recovery in exports to gather momentum, backed by the global technology upcycle.
"Tourist arrivals and spending are also poised to rise further," with continued growth in both employment and wages supporting household spending.
It expects inflation to remain moderate this year, broadly reflecting stable demand and contained cost pressures.
The decision to hold comes as many central banks in Asia keep policy settings steady as they look to balance supporting economic growth against inflationary and currency pressures.
Bank Negara has recently affirmed its data-dependent stance as it awaits more details on government subsidy cuts, which could spark inflation, CIMB economists Michelle Chia and Lim Yee Ping said in a note this week.
With inflation staying benign for now and economic growth steady, there's seemingly little urgency for the bank to come off the sidelines.
Write to Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
05-09-24 0319ET
