KUALA LUMPUR, January 20 ― Malaysia’s central bank kept its benchmark interest rate unchanged at a record high today, as expected, to support the economic recovery.
All 23 economists polled in a Reuters poll expected Bank Negara Malaysia (BNM) to hold its overnight rate at a record high of 1.75%.
Latest indicators show economic activity rebounded in the fourth quarter for Malaysia, in line with the easing of Covid-19 containment measures, the central bank said in a statement.
The latest data showed Malaysia’s economy shrank 4.5% in the third quarter after rebounding in the second quarter, but the central bank expects a quick recovery as coronavirus restrictions are eased and that economic activities resume.
Since 2020, the government has rolled out RM530 billion in stimulus packages, while the BNM has cut its policy rate by 125 basis points to cushion the economic fallout from the pandemic.
Growth is expected to pick up this year, driven by stronger global demand and higher private sector spending amid labor market improvements and continued policy support, the bank said.
The central bank has forecast that the economy will grow between 5.5% and 6.5% this year, compared to around 3 to 4% in 2021. There are risks to this outlook, however.
“Such risks may arise from weaker-than-expected global growth, worsening supply chain disruptions and the emergence of severe and vaccine-resistant variants of Covid-19,” he said. he declares.
Malaysia’s central bank will wait until at least July before raising interest rates, according to the Reuters poll. ― Reuters