At the Monetary Policy Committee
(MPC) meeting today, Bank Negara Malaysia decided to maintain the Overnight
Policy Rate (OPR) at 3.00 percent.
The global economy continues to be confronted with some uncertainties. While
there have been improvements in the advanced economies, risks to sustained
recovery remain. In Asia, growth continues to be supported by domestic
demand and a gradual improvement in intra-regional trade. While global
financial markets have broadly improved, markets remain vulnerable to
setbacks and changes in sentiments.
In the domestic economy, the latest indicators point to robust investment
activity and continued expansion in private consumption. Going forward, this
trend is expected to continue. Private consumption is supported by sustained
income growth amid stable labour market conditions. Investment is being led
by capital spending in the domestic-oriented sectors, the oil and gas
industry and the ongoing implementation of infrastructure projects. The
external sector is also expected to improve and provide additional support
to the economy.
Inflation remained low at 1.3% in January. While inflation is expected to
rise during the year, the expectation is for it to remain modest. Higher
global prices of selected food commodities and domestic factors are expected
to increase costs and contribute to higher prices. Nevertheless, in line
with modest global growth prospects, pressures from global commodity prices
are expected to be contained.
The MPC considers the current stance of monetary policy to be appropriate
given the outlook for inflation and growth. In addition to domestic
conditions, the MPC will continue to carefully assess the global economic
and financial developments and their implications on the overall outlook for
inflation and growth of the Malaysian economy.
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