Malaysia Central Bank Keeps Rate On Hold

(RTTNews) - Malaysia's central bank left its interest rates unchanged on Thursday despite the sharp weakening of the currency.

The Monetary Policy Committee of Bank Negara Malaysia headed by Datuk Abdul Rasheed Ghaffour decided to retain the Overnight Policy Rate at 3.00 percent. Markets widely expected the bank to keep the rate on hold.

The bank had changed the rate last in May, when it was raised by 25 basis points. "At the current OPR level, the monetary policy stance remains supportive of the economy and is consistent with the current assessment of the inflation and growth prospects," the bank said in the statement.

Capital Economics' economist Shivaan Tandon said interest rates are likely to remain unchanged until the end of this year and throughout 2024.

The central bank said economic activity improved in the third quarter. In 2024, growth will be driven by resilient domestic expenditure. Inflation is forecast to remain moderate next year.

Although expectations of a higher-for-longer interest rate environment in the US and geopolitical tensions affected the ringgit, these developments are not expected to derail Malaysia's growth prospects, the bank said.

The bank added that it will continue to manage risks of heightened volatility and ensure the orderly functioning of the forex market.