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 improve at a moderate pace. In the major
advanced economies, recovery remains gradual and uneven. In Asia, growth has
been sustained by improvements in export performance amid moderating
domestic economic activity. Although volatility in the global financial
markets has receded, markets remain vulnerable to setbacks and changes in
sentiment. Looking ahead, there remain considerable risks that could affect
the pace of the global recovery.
In the Malaysian economy, the expansion in domestic activity was supported
by improvements in exports. Private consumption and investment activity also
continued to sustain domestic demand amid a slower pace in public sector
spending. Going forward, the growth momentum will benefit from the expected
improvement in the external sector amid some moderation in domestic demand.
Domestic investment activity will however continue, led by private sector
capital spending and the ongoing implementation of infrastructure projects.
Domestic demand is expected to moderate, reflecting the public sector
consolidation and some moderation in private consumption. Uncertainties in
the global environment may also affect the overall growth momentum.
Inflation rose to 2.6% in September, reflecting mainly the increase in
petrol prices. For the first nine months of the year, inflation remained low
at 1.8%. Looking ahead, inflation is expected to edge up driven by domestic
cost factors. However, the inflation outlook is expected to be tempered by a
stable external price environment, moderate domestic demand pressures,
expansion in domestic capacity and improvements in food production and
distribution.
In the MPC’s assessment, there continue to be uncertainties in the balance
of risks surrounding the outlook for domestic growth and inflation. The MPC
will continue to carefully assess the global and domestic economic and
financial developments and their implications on the overall outlook for
inflation and growth of the Malaysian economy.
The meeting also approved the schedule of MPC meetings for 2014. In
accordance with the Central Bank of Malaysia Act 2009, the MPC will convene
six times during the year. The meetings will be held over two days, with the
Monetary Policy Statement released at 6 p.m. on the second day of the MPC
meeting 1.
|