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Monetary Policy Statement

Ref No : 09/12/03 06 Sep 2012 Embargo : Not for publication or broadcast before 1800 hours on Thursday 06 September 2012

At the Monetary Policy Committee (MPC) meeting today, Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 3.00 percent.

The global growth momentum has moderated. Economic activity in most major advanced economies is slower amid greater policy uncertainty while conditions in the international financial markets continue to be volatile. These developments are affecting growth in the rest of the world. In emerging economies including in Asia, domestic demand is showing signs of moderation amid sustained weakness in external activity.

While the Malaysian economy is affected by these global developments, domestic demand has continued to support economic growth. Looking ahead, this trend is expected to continue. Private consumption is supported by income growth and stable employment conditions. Investment activity is mainly driven by capital spending in the domestic-oriented industries, the oil and gas sector and the on-going implementation of infrastructure projects.

Headline inflation is expected to remain moderate for the remainder of 2012 and into 2013. With some excess capacity in the economy, domestic demand is not expected to result in inflationary conditions.  Global energy and commodity prices are likely to be contained given the weak global conditions.  However, upside risks to inflation could emerge should supply disruptions result in higher global prices for commodities.

In the MPC's assessment, there continues to be considerable uncertainties in the global economic and financial conditions.  In this environment, the MPC considers the current stance of monetary policy to be accommodative and supportive of the economy.  The MPC will continue to carefully assess these evolving conditions and their implications on the overall outlook for inflation and growth of the Malaysian economy.


Bank Negara Malaysia
06 Sep 2012

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