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Malaysia Leaves Key Rate Unchanged

Malaysia Leaves Key Rate UnchangedMalaysia Leaves Key Rate Unchanged

Malaysia left interest rates unchanged as accelerating inflation reduced scope for a cut in borrowing costs at Governor Zeti Akhtar Aziz’s last scheduled policy-setting meeting. Bank Negara Malaysia kept the overnight policy rate at 3.25% for a 10th meeting, it said in a statement in Kuala Lumpur Wednesday. The decision was predicted by all 20 economists surveyed by Bloomberg News. The central bank also kept the statutory reserve ratio steady after a 50-basis-point cut at the January meeting. Malaysia’s growth is slowing as rising costs eat into disposable incomes and erode consumer confidence, and companies hold back on investments. Inflation in January accelerated to the fastest pace since 2014, while a slump in crude has curbed government revenues and prompted Prime Minister Najib Razak to trim the growth forecast for 2016. “It’s not a surprising stance given that inflation has stayed above the policy rate,” Wellian Wiranto, an economist in Singapore at Oversea-Chinese Banking Corp., said before the decision.

Financialtribune.com