Malaysian Ringgit: Stable policy underpins growth narrative – BNY
Geoff Yu notes that Bank Negara Malaysia kept its policy rate at 2.75%, judging the stance consistent with price stability and sustainable growth. The bank sees Malaysia’s economy on track for around 5% growth this year, with low inflation and limited external cost pass-through.
Bank Negara Malaysia maintained its policy rate at 2.75%, stating this was in line with maintaining price stability and sustainable growth. The Central Bank of Malaysia anticipates Malaysia's economy to expand by roughly 5% this year, bolstered by robust exports, resilient domestic demand, tech-related trade, tourism, and investments.
H1 economic growth was recorded at 5.7%, with headline and core inflation averaging 1.8% and 2.0%, respectively, showing limited impact from external cost increases. Despite these positive indicators, the Monetary Policy Committee (MPC) cautioned that risks such as Middle East tensions, rising commodity prices, and more stringent global financial conditions persist.
Consequently, the MPC decided to hold the policy rate, while closely monitoring inflation trends and domestic demand.
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