KUALA LUMPUR, May 9 (Xinhua) -- Malaysian Central Bank said Thursday it has decided to maintain the overnight policy rate (OPR) at 3 percent.
Bank Negara Malaysia (BNM) said in a statement that at the current OPR level, the monetary policy stance remains supportive of the economy and is consistent with the current assessment of the inflation and growth prospects.
For the Malaysian economy, BNM said the latest indicators point towards higher economic activity in the first quarter of 2024, driven by resilient domestic expenditure and a positive turnaround in exports.
Going forward, the recovery in exports is expected to gather momentum supported by the global tech upcycle and continued strength in non-electrical and electronics goods, said BNM.
The growth outlook, however, is subject to downside risks from weaker-than-expected external demand, and larger declines in commodity production.
According to the bank, the ringgit currently does not reflect Malaysia's economic fundamentals and growth prospects.
It said external factors, namely shifting expectations of major economies' monetary policy paths and ongoing geopolitical tensions, have led to heightened volatility in both capital flows and exchange rates across the region, including the ringgit.
It noted that the coordinated initiatives by the government and BNM with the government-linked companies (GLCs) and government-linked investment companies (GLICs), and corporate engagements have gained further traction, cushioning the pressure on the ringgit.
"BNM will continue to manage risks arising from heightened financial market volatility," it said. ■
