The Central Bank of Malaysia has kept its interest rate unchanged at 2.75% for the sixth consecutive time, citing that inflation is under control, despite ongoing conflicts in the Middle East posing a risk to the global economy.
On July 9, 2569 at 14.00:XNUMX p.m., Bloomberg News reported that The Central Bank of Malaysia (BNM) decided to keep its overnight policy rate (OPR) unchanged at 2.75% at its meeting on July 9, 2569. This marks the sixth consecutive time interest rates have been kept unchanged, with the current level deemed appropriate as inflationary pressures remain under control, despite the ongoing uncertainty in the Middle East.
This decision aligns with the predictions of 24 out of 25 economists surveyed by Bloomberg, while the last interest rate adjustment occurred in July 2568, when the central bank cut rates by 0.25%.
BNM specify that The decline in global oil prices to near pre-Iran war levels has eased inflationary pressures and allowed the central bank to keep interest rates unchanged. Even during periods of soaring energy prices, Malaysia's inflation rate remained within the official target range.
The Malaysian economy continued to expand relatively strongly, driven by investment in artificial intelligence (AI) and robust household spending, which was supported by government subsidies, thus mitigating the full impact of higher energy prices.
However, central banks warned of continued risks from conflicts in the Middle East following the collapse of the ceasefire between the US and Iran this week, which could lead to renewed volatility in global commodity prices.
BNM specify that Risks to the global economy remain downside-oriented due to geopolitical uncertainty, tight global financial conditions, and concerns about asset valuations in financial markets. Positive factors may include a faster-than-expected recovery in supply chains, increased technology investment, and stimulus measures from major economies.
Although Malaysia's overall inflation rate accelerated in May to its highest level in almost two years, it remains low compared to many countries in the region.
The central bank reiterated that the policy interest rate of 2.75% remains consistent with its goals of maintaining price stability and sustainable economic growth.
In this statement, BNM did not directly mention the ringgit; however, its recent appreciation may have helped alleviate import inflationary pressures following the central bank's announcement of capital inflow incentives on June 24th. As a result, the ringgit has outperformed most Asian currencies and has weakened against the US dollar by only 0.4% since the beginning of the year.
In comparison, the Indonesian rupiah and the Philippine peso both depreciated by more than 4% during the same period, even though both countries had raised interest rates.
refer : www.bloomberg.com
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