KUALA LUMPUR: Bank Negara Malaysia (BNM) has decided to maintain the Overnight Policy Rate at 3.25%, following the Monetary Policy Commitee meeting yesterday.
The central bank said while Malaysian financial markets had been affected by global developments, there has been no disruption to financial intermediation.
“There remains ample liquidity in the domestic financial system, with continued orderly functioning of the financial markets. The banking institutions are operating with strong capital and liquidity buffers, and continue to provide financing to the economy,” it said in a statement, noting it would continue to monitor the risks of destabilising financial imbalances. BNM added economic activity will continue to be supported by growth in domestic demand amid a moderation in exports in the fourth quarter of 2014. It believes going forward, domestic demand will remain the key driver of growth.
“While private consumption is expected to moderate, it will remain supported by the steady rise in income and employment, and the additional disposable income from the lower oil prices,” said the central bank.
Meanwhile, it expects investment activity to remain resilient, with broad-based capital spending by both the private and public sectors cushioning the lower oil and gas-related investments.
This article first appeared in The Edge Financial Daily, on January 29, 2015.