KUALA LUMPUR – Malaysia’s central bank kept its benchmark interest rate unchanged on Wednesday, in line with market expectations, amid a positive economic growth outlook and steady inflation.
At its final policy meeting of 2024, Bank Negara Malaysia (BNM) maintained its overnight policy rate at 3.00%, where it has been since May 2023.Economists polled by Reuters expect the central bank will stand pat on rates until at least 2026.
BNM said the latest indicators point towards sustained strength in economic activity driven by resilient domestic expenditure and higher export activity.
Headline and core inflation remain modest, averaging 1.8% year-to-date, the bank said.
“Going into 2025, inflation is expected to remain manageable, amid the easing global cost conditions and the absence of excessive domestic demand pressures,” it said in a statement.
However, the bank cautioned that the inflation outlook remains subject to the impact of government policies.
This year the government cut costly blanket subsidies for diesel, electricity, and chicken, among others, and plans to extend the policy to a widely used transport fuel in the middle of 2025.
In the budget last month, the government raised its forecast for economic growth in 2024 to a range of 4.8% to 5.3%, from 4% to 5% previously.
Official advance estimates put annual economic growth at 5.3% in the third quarter, slower than the 5.9% growth rate in the second quarter.