KUALA LUMPUR: The central bank is expected to leave its benchmark rate at 3.25% at a policy review on Tuesday, a Reuters poll showed.
Inflation does not strictly guide the central bank’s rate decisions, and January’s deflation is unlikely to prompt any change, HSBC said. In February, BNM said it expects the economy to remain on a steady growth path this year, supported by domestic demand and improving external appetite for Malaysia’s exports.
“There is room for the central bank to ease if they need to, but at this juncture, they will likely want to keep their gunpowder dry in view of possibly more risk coming in later,” said Julia Goh, a Malaysia-based economist with UOB Bank.Malaysia last cut its policy rate in July 2016, to 3.00% after the UK’s vote for Brexit. The central bank raised the rate back to 3.25% in January 2018 to “normalise” policy.