KUALA LUMPUR: Bank Negara Malaysia left borrowing costs unchanged, saying the Overnight Policy Rate at 3.25 per cent is supportive of economic activity.
The decision was in line with market expectations.
The Monetary Policy Committee, which was chaired by Governor Tan Sri Dr Zeti Akhtar Aziz, said it will assess developments and the risks to inflation and on the Malaysian economy.
The prospects now are for the Malaysian economy to still remain on a steady growth path.
Headline inflation declined in January and is expected to remain low in the first quarter of 2015.
“For the rest of the year, headline inflation is expected to trend higher, but to be below its historical average,”it said, adding that the lower fuel prices will partially offset other domestic cost factors.
“While the monthly headline inflation would be subjected to the volatility in global oil prices, underlying inflation is expected to remain contained amid the stable domestic demand conditions.”
It said while the financial markets here had been affected by developments in the international financial markets, liquidity remained strong and orderly and there were no disruptions.
The banking institutions are also operating with strong capital and liquidity buffers, and continue to provide financing to the economy.