The Bank of Malaysia (BNM) has announced its decision to keep the policy interest rate steady at 3%, marking the second consecutive month of this unchanged stance. This move, taken at the recent meeting on September 7, aligns with market expectations and comes in response to ongoing trends of slowing economic growth and inflation. It also follows an unexpected policy interest rate hike in May.
In a statement, BNM emphasized that the current policy interest rate level reflects the central bank’s commitment to supporting the Malaysian economy. It is in line with the prevailing assessments of inflation and the trajectory of economic growth.
Malaysia’s economy achieved robust growth in 2022, reaching a 22-year high at 8.7%, a notable rebound after the relaxation of COVID-19 control measures. However, the pace of economic expansion has markedly decelerated in the current year, primarily due to sluggish exports.
Furthermore, BNM reported that both general and core inflation have also experienced deceleration and are anticipated to continue their downward trajectory in the latter half of this year. General inflation is projected to range between 2.8% and 3.8% in 2023, compared to the 3.3% recorded in the previous year.
The Bank of Malaysia’s decision to maintain the policy interest rate reaffirms its commitment to striking a balance between stimulating economic recovery and managing inflationary pressures. This measured approach aims to support the Malaysian economy during a period of uncertainty while aligning with the evolving economic landscape.