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Monetary Policy Statement

Ref No : 03/13/03 07 Mar 2013 Embargo : Not for publication or broadcast before 1800 hours on Thursday 07 March 2013
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 economy continues to be confronted with some uncertainties. While there have been improvements in the advanced economies, risks to sustained recovery remain.  In Asia, growth continues to be supported by domestic demand and a gradual improvement in intra-regional trade. While global financial markets have broadly improved, markets remain vulnerable to setbacks and changes in sentiments.
In the domestic economy, the latest indicators point to robust investment activity and continued expansion in private consumption. Going forward, this trend is expected to continue. Private consumption is supported by sustained income growth amid stable labour market conditions.  Investment is being led by capital spending in the domestic-oriented sectors, the oil and gas industry and the ongoing implementation of infrastructure projects.  The external sector is also expected to improve and provide additional support to the economy.
Inflation remained low at 1.3% in January.  While inflation is expected to rise during the year, the expectation is for it to remain modest.  Higher global prices of selected food commodities and domestic factors are expected to increase costs and contribute to higher prices.  Nevertheless, in line with modest global growth prospects, pressures from global commodity prices are expected to be contained. 
The MPC considers the current stance of monetary policy to be appropriate given the outlook for inflation and growth.  In addition to domestic conditions, the MPC will continue to carefully assess the global economic and financial developments and their implications on the overall outlook for inflation and growth of the Malaysian economy.

Bank Negara Malaysia
07 Mar 2013

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