In a statement today, the central bank said at the current OPR level, the degree of monetary accommodativeness is consistent with the intended policy stance.
“The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation,” it added.
The MPC meeting is the fourth held this year and the first chaired by the newly-appointed Governor, Datuk Nor Shamsiah Mohd Yunus.
BNM said the Malaysian economy continued to expand in the first half of 2018, supported by private sector activity with additional impetus from net exports.
It said the positive growth performance is expected to be sustained, driven by both domestic and external demand.
“Private consumption will be underpinned by continued wage and employment growth, with an additional lift from higher household spending due to the tax holiday.
“While investment activity is projected to be supported by capacity expansion mainly in the export-oriented industries and ongoing infrastructure projects, particularly in the transport and utilities sub-sectors,” it added.
The central bank said the external sector will continue to benefit from the sustained global growth momentum and the growth outlook will be further supported with greater certainty in domestic policy in the coming months.
“Overall, the Malaysian economy is expected to remain on a steady growth path,” it said.
BNM said headline inflation for 2018 is projected to be lower than earlier forecast taking into consideration the impact of recent policy measures on domestic cost factors.
“The impact of these measures on inflation, however, is transitory. Headline inflation is likely to turn negative in some months and remain low in the first half of 2019 before trending upwards as these transitory effects lapse.
“Core inflation is nevertheless expected to remain relatively stable in line with sustained domestic demand,” it said.
BNM said the positive domestic economic outlook, sound financial sector and improving current account surplus of the balance of payments will continue to support Malaysia’s fundamentals.
“Domestic financial markets have remained resilient despite non-resident portfolio outflows. The ringgit exchange rate would be more reflective of the underlying fundamentals of the economy when the external and domestic uncertainties recede.
“Notwithstanding the heightened financial market volatility, the domestic monetary and financial conditions remain supportive of economic growth,” it said. — Bernama
Source: The Malay Mail Online