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Monetary Policy Statement

Ref No : 07/07/07 24 Jul 2007 Embargo : Not for publication or broadcast before 1800 hours on Tuesday 24 July 2007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.

The overall growth of the Malaysian economy in the first half of the year has remained favourable with the slower growth in the external sector being balanced by stronger growth in domestic demand. During the second half of 2007, the growth momentum of the economy is expected to strengthen. Recent trade data suggest that the sustained growth in Malaysia's major trading partner economies is starting to provide support to export growth. This will complement the robust growth in both domestic consumption and investment that is expected to be sustained for the rest of the year.

Inflation moderated in the first half of 2007 to a level of 1.4% in June and averaged 2% for the period as a whole. During the second half of 2007, inflation may edge up due to both domestic and external factors, but the average rate of inflation for 2007 is expected to be at the lower end of the projected range of 2-2.5 percent.

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 Jul 2007

© Bank Negara Malaysia, 2007. All rights reserved.