KUALA LUMPUR Nov 7 Malaysia's central bank left
its key interest rate unchanged at 3.00 percent on Thursday as
expected, but warned that it expects inflation to edge up over
the coming months driven by domestic cost pressures.
However, Bank Negara Malaysia's monetary policy committee
said in a statement that the outlook for inflation is expected
to be tempered by a host of factors including stable external
prices as well improvements in food production and distribution.
Annual inflation accelerated to 2.6 percent in September, a
20-month high, due to a hike in petrol prices as the government
cut fuel subsidies. August's annual inflation rate was 1.9
Malaysia's policy rate has been steady since mid-2011, and
all 11 economists in a Reuters poll expected the central bank to
keep it unchanged. Most analysts expect no rate change until the
second half of 2014.
The central bank said Malaysia's economy will benefit from
an "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," it added.
For the full central bank monetary policy statement, click
For a graphic of Malaysia's inflation and overnight policy
rate, please see: link.reuters.com/jem28s
(Reporting by Siva Sithraputhran; Editing by Kim Coghill)