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Monetary Policy Statement

Ref No : 08/07/04 24 Aug 2007 Embargo : Not for publication or broadcast before 1815 hours on Friday 24 August 2007

At its meeting today, Bank Negara Malaysia's Monetary Policy Committee (MPC) decided to leave the Overnight Policy Rate (OPR) unchanged at 3.50 percent.

During the first half of 2007, growth of the Malaysian economy has remained favourable with the slower external sector being balanced by stronger growth in domestic demand. In assessing the outlook for the rest of the year, the turbulence in the global financial markets over the recent weeks has created a higher degree of uncertainty regarding global economic growth. While the Malaysian economy is not insulated from the volatility in the global financial markets and possible consequential moderation in global demand, strong domestic fundamentals will provide a sound foundation for growth.

While rising global food and commodity prices could potentially increase the risk of higher prices, the inflation rate in Malaysia is expected to remain low. Inflationary expectations are also well-contained.

The future stance of monetary policy would be determined by Bank Negara Malaysia's assessment of new data and information and their implications on the medium-term prospects for price stability and economic growth.

Bank Negara Malaysia
24 Aug 2007

© Bank Negara Malaysia, 2007. All rights reserved.