05.09.201804:27:00UTC+00Malaysia Central Bank Holds Key Interest Rate Unchanged

Malaysia central bank left its key interest rate unchanged on Wednesday, as expected, and it assessed growth to remain steady despite downside risks.

The Monetary Policy Committee decided to maintain the Overnight Policy Rate at 3.25 percent, the Bank Negara Malaysia said.

The previous change in the rate was a quarter-point hike in January.

"At the current level of the OPR, the degree of monetary accommodativeness is consistent with the intended policy stance," the bank said.

"The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation."

The Malaysian economy faces downside risks stemming from heightened trade tensions, prolonged weakness in the mining and agriculture sectors and some domestic policy uncertainty, the central bank noted.

"On balance, the Malaysian economy is expected to remain on a steady growth path," the bank added.

The bank forecast headline inflation to edge upwards going forward and into 2019, taking into consideration the impact of policy measures on domestic cost factors.

The impact of the changes in the consumption tax policy on headline inflation will be transitory and lapse towards the end of 2019, the BNM noted.

Underlying inflation is nevertheless expected to remain relatively stable, the bank added.