BENGALURU- Malaysia’s central bank will keep its key interest rate at 3.0 percent on Thursday and throughout the year as inflation remains stable and economic growth steady, a Reuters poll of economists found.
Despite growing external risks – such as an economic slowdown in China, Malaysia’s major trading partner, and possible US trade tariffs – resilient domestic growth and stable inflation should allow the bank to extend its policy pause.
This sets it apart from its regional peers – Bank Indonesia, the Bank of Thailand, the Philippine central bank and the Bank of Korea – which have all cut rates to support sluggish growth.
All 35 economists in the February 25–March 3 Reuters poll said Bank Negara Malaysia would keep its overnight policy rate at 3.00 percent on March 6, where it has remained since May 2023, and maintain it at that level throughout the year.
That view has remained unchanged for over a year.
“Inflation has remained stable … domestic demand is unlikely to rebound materially in 2025. Overall growth will ease slightly but will still be healthy and should not require any monetary policy action,” said Arindam Chakraborty, an economist at ANZ.
Although the central bank does not have a currency mandate, its January policy statement expressed concerns about ringgit volatility due to global policy uncertainties, suggesting a surprise policy move is unlikely.
The currency has depreciated about 1.4 percent since Donald Trump’s victory in the US presidential election in November.
An overwhelming majority of economists polled by Reuters saw no policy change this year, suggesting the central bank will wait and see how external and domestic factors unfold.
