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Monetary Policy Statement

Ref No : 11/14/02 06 Nov 2014 Embargo : Not for publication or broadcast before 1800 hours on Thursday 06 November 2014

At the Monetary Policy Committee (MPC) meeting today, Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 3.25 percent.
 
The global economy continues to expand at a moderate pace. Growth across the advanced economies has been uneven. In Asia, growth is being sustained by the continued expansion in domestic demand and exports. Looking ahead, while the overall global growth momentum is expected to improve, the growth forecast has been revised downwards due to weakening economic activity in a number of major economies. Consequently, the downside risks to global growth have increased. Volatility in the international financial markets has also risen.

For Malaysia, while domestic demand has continued to support growth, exports have shown signs of moderation. Going forward, domestic demand will still remain the key driver of growth. Private consumption is expected to moderate, but investment activity is projected to remain robust, supported by broad-based capital spending by both the private and public sectors. While the moderating trends will affect the overall growth prospect, the Malaysian economy is still projected to remain on a steady growth path.

Inflation is projected to trend higher for the remainder of the year and will continue to be above its long-term average next year due to domestic cost factors. However, the absence of external price pressures and more moderate demand conditions are expected to mitigate the impact of these cost factors on the underlying inflation.

The current stance of monetary policy remains accommodative and is assessed to be appropriate given the developments in monetary and financial conditions. Moving forward, the MPC will continue to carefully assess the balance of risks surrounding the outlook for domestic growth and inflation.  The MPC will also remain vigilant to the risks of destabilising financial imbalances.  This is to ensure that the monetary policy stance is consistent with the sustainability of the growth prospects of the Malaysian economy. 

The meeting also approved the schedule of MPC meetings for 2015. In accordance with the Central Bank of Malaysia Act 2009, the MPC will convene six times during the year. The meetings will be held over two days, with the Monetary Policy Statement released at 6 p.m. on the second day of the MPC meeting.

Schedule of Monetary Policy Committee Meetings for 2015

MPC Meeting No.

Dates

1st

27 and 28 January 2015 (Tuesday and Wednesday)

2nd

4 and 5 March 2015 (Wednesday and Thursday)

3rd

6 and 7 May 2015 (Wednesday and Thursday)

4th

8 and 9 July 2015  (Wednesday and Thursday)

5th

2 and 3 September 2015 (Wednesday and Thursday)

6th

4 and 5 November 2015 (Wednesday and Thursday)


Bank Negara Malaysia
06 Nov 2014

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