At the Monetary Policy Committee (MPC) meeting today, Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 3.00 percent.

The global economy is expected to continue to experience slow growth.  There continues to be uncertainties surrounding the growth prospects of the advanced economies.  However, despite the weaker external demand, growth in the regional economies remains supported by domestic demand. 

In the Malaysian economy, the sustained expansion in domestic activity has offset the weaknesses in the external sector. Looking ahead, private consumption will be supported by the income growth and stable employment conditions. Investment is expected to remain firm, led by increased capital spending in the domestic-oriented sectors, the oil and gas sector and the on-going implementation of infrastructure projects.

Headline inflation is expected to remain moderate for the remainder of 2012.  While inflation may increase in 2013, it is expected to remain modest given the excess capacity in the economy.  Global energy and commodity prices are also likely to be contained given the weak global conditions.  Upside risks to inflation could however emerge in the event of supply disruptions that results in higher global prices for commodities.

The MPC considers the current stance of monetary policy to be accommodative and supportive of the economy.  In addition to domestic conditions, the MPC will continue to carefully assess the global economic and financial developments and their implications on the overall outlook for inflation and growth of the Malaysian economy.

The meeting also approved the schedule of MPC meetings for 2013. In accordance with the Central Bank of Malaysia Act 2009, the MPC will convene six times a year. The meetings will be held over two days, with the Monetary Policy Statement released at 6 p.m. on the second day of the MPC meeting¹.

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¹This has been the practice since January 2010 following the coming into force of the Central Bank of Malaysia Act 2009.