Bank Negara has announced that the Monetary Policy Committee (MPC) has decided that it will maintain the overnight policy rate (OPR) at 3%.
In a statement issued by Bank Negara, it said that the MPC considers the current stance of monetary policy to be accommodative and supportive of the economy. Additionally, the committee will continue to assess the global economic and financial developments, includings its implications on the overall outlook for inflation and growth of the Malaysian economy.
As the global economy is expected to continue experiencing slow growth, the growth prospects of advanced economies remains uncertain.
Despite the weaker external demand, Bank Negara said in a statement that growth in the regional economies would remain supported by domestic demand.
In the local economy, the sustained expansion in domestic activity has offset the weaknesses in the external sector. Moving forward, Bank Negara believes that income growth and stable employment condistions will support private consumption.
“Investment is expected to remain firm, led by increased capital spending in the domestic-oriented sectors, the oil and gas sector and the on-going implementation of infrastructure projects,” the central bank said.
Bank Negara expects headline inflation is to remain moderate for the remainder of the year. “While inflation may increase in 2013, it is expected to remain modest given the excess capacity in the economy. Global energy and commodity prices are also likely to be contained given the weak global conditions. Upside risks to inflation could, however, emerge in the event of supply disruptions that results in higher global prices for commodities,” it added.
The MPC meeting has also approved the schedule of its meetings for 2013.