Bank Negara Malaysia Holds Interest Rate at 3.00%

The Bank Negara Malaysia kept its Overnight Policy Rate (OPR) steady at 3.00%.  The Bank said: "The domestic economy improved in the third quarter, due primarily to stronger domestic demand. Export performance also improved, reflecting firm regional demand and the normalisation of trade flows from supply chain disruptions. Looking ahead, the weaker external environment could, however, impact the overall growth prospects. Domestic demand will continue to be the anchor of growth, supported by private consumption and investment and reinforced by public sector spending and investment activity. Employment conditions are also expected to remain stable."

The Bank Negara Malaysia last increased the OPR by 25 basis points to 3.00% in May this year, it also increased the Statutory Reserve Requirement (SRR) by 100bps to 3.00% at that meeting, and increased the SRR again in July by 100bps to 4.00%.  Malaysia saw inflation of 3.4% in September, compared to 3.3% in August, 3.4% in July, 3.5% in June, 3.3% in May, 3.2% in April, and 3.0% March.  

The Malaysian economy grew 2.8% in the June quarter, compared to -2.8% in the March quarter (+1.5% in Q4 2010), while growing 4% on an annual basis compared to 4.9% in the previous quarter (4.8% in Q4 2010).  Malaysia's currency, the Malaysian ringgit (MYR), has weakened about 3% against the US dollar so far this year, while the USDMYR exchange rate last traded around 3.14

www.CentralBankNews.info