KUALA LUMPUR, May 8 (Reuters) - Malaysia’s central bank held its key interest rate at 3.00 percent on Thursday, as expected, reiterating that conditions in the international financial markets have improved following gradual and orderly policy adjustments in the major economies.
“Going forward, growth will remain anchored by domestic demand with additional support from the improved external environment,” Bank Negara Malaysia’s monetary policy committee said in a statement.
Bank Negara added, “Looking ahead, the global economy is expected to remain on a path of gradual recovery”.
(Full text of central bank’s statement: )
Malaysia’s policy rate has been steady since mid-2011, and all 16 economists in a Reuters poll expected the central bank to keep it unchanged on Thursday.
“Inflation has stabilised in recent months amid the more favorable weather conditions and as the impact of the price adjustments for utilities and energy moderate,” the central bank added.
The annual inflation rate was 3.5 percent in March. This year’s pace has been significantly higher than in 2013, due to hikes in the prices of food, transport and electricity.
Most economists continue to expect a 25 basis points increase in the policy rate in the second half of the year, to deal with prices rises after the government reduced subsidies.
For a graphic of Malaysia's inflation and overnight policy rate, please see: link.reuters.com/jem28s
Reporting by Hawa Semasaba; Editing by Richard Borsuk