KUALA LUMPUR, March 7 Malaysia's central bank
left its key interest rate unchanged at 3.00 percent on
Thursday, as expected, saying the current monetary stance is
appropriate for the country's growth and inflation outlook.
A Reuters poll of 15 economists had predicted Bank Negara
would stand pat on the overnight policy rate (OPR)
as inflation remains mild.
But some economists said the central bank may consider
hiking borrowing costs later in the year if prices begin to
climb at a faster pace.
Bank Negara has kept the rate settings steady since May
"While inflation is expected to rise during the year, the
expectation is for it to remain modest," the central bank's
monetary policy committee said in a statement.
"In the domestic economy, the latest indicators point to
robust investment activity and continued expansion in private
consumption," it said, adding that this trend is expected to
continue going forward.
Malaysia reported surprisingly robust 6.4 percent growth in
the fourth quarter, which analysts attribute to the government's
aggressive initiatives on a $444 billion economic transformation
programme and the central bank's accommodative monetary policy.
Price pressures could pick-up from the third quarter as
disposable incomes rise and the expected global recovery spurs
Malaysia's trade-sensitive economy.
Policymakers are also watching to see if the implementation
of a minimum wage policy on Jan. 1 will spur price pressures in
A separate Reuters poll showed that the country's inflation
could quicken later in the year, but remain within an average of
2.5 percent. Government-controlled petrol prices and electricity
tariffs are expected to rise in the second half of 2012 after a
general election is held.
For the full central bank monetary policy statement, click
(Reporting by Anuradha Raghu; Editing by)