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 assessment made on the Malaysian economy in the previous Monetary Policy Statement continues to hold. Despite the expected moderation in global growth in the second half of 2006, latest economic data shows that the Malaysian economy continues to grow at a steady rate.

In accordance with expectations, inflation has continued to decelerate. At this stage, the moderation of global oil prices, if sustained, combined with the expected mild moderation in global growth, would contain inflationary pressures in the near future. While inflation may increase slightly in the coming months due to seasonal factors, the broad trend towards easing price pressures should continue if current developments are sustained.

The future stance of monetary policy would depend on Bank Negara Malaysia's assessment of new information on the outlook for economic growth and inflation.