In line with widespread expectations, Bank Negara Malaysia (BNM) decided to maintain the overnight policy rate (OPR) at 3.00%.
These are the details of the follow-up statement from BNM following the decision.
The global economy continues to be weighed down by persistent core inflation and higher interest rates.
Slower-than-expected growth in China is weighing on the global economy.
Global core inflation remains above historical averages, although core inflation continues to moderate.
For most central banks, the monetary policy stance is likely to remain tight.
The outlook remains dependent on downside risks especially in major economies due to geopolitical tensions, inflation and a sharp tightening in financial market conditions.
In Malaysia, the economy in the second quarter was affected by slower external demand and falling commodity production.
Further growth this year will continue to be driven by domestic spending amid a challenging external environment.
Household spending continues to be supported by a favorable labor market.
Domestic financial conditions also remain conducive to financial intermediation amid sustained credit growth.
Moderating trends in both headline and core inflation are expected to continue in the second half of 2023.
Risks to the inflation outlook remain subject to changes to domestic policies such as subsidies and price controls, global commodity prices and financial market developments as well as core inflation.
At current levels, the stance of monetary policy is slightly accommodative and remains supportive of the economy.
However, remain alert to ongoing developments to inform assessments of the outlook for inflation and domestic growth.
The MPC will ensure that the monetary policy stance remains conducive to sustainable economic growth in stable price conditions.
