KUALA LUMPUR (July 13): Bank Negara Malaysia maintained the overnight policy rate (OPR) at 3.00% in anticipation the country will register higher economic growth and moderating inflation.

In a statement today, Bank Negara said at the OPR's current level, the central bank's monetary policy was accommodative and supportive of economic activity.

“The Malaysian economy performed better than expected in the first quarter of 2017. Growth was lifted by stronger domestic demand, with additional impetus from exports. Overall, the economy is expected to register higher growth in 2017. 

“Headline inflation is expected to moderate in the second half of the year, mainly reflecting the waning effect of global cost factors. Underlying inflation, as measured by core inflation, will be sustained by the more robust domestic demand, but is expected to remain contained,” Bank Negara said.

Bank Negara also noted domestic financial markets had been resilient and that the ringgit had remained stable.

The central bank said the ringgit remained stable due to a more balanced demand and supply of foreign currencies, following implementation of Malaysia's financial market development measures.

"Banking system liquidity remains sufficient with financial institutions continuing to operate with strong capital and liquidity buffers. The growth of financing to the private sector has improved, consistent with the pace of economic activity," Bank Negara said.