Malaysia CB holds settings steady

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KUALA LUMPUR- Malaysia’s central bank kept its benchmark interest rate unchanged on Thursday, as its monetary stance was supportive to the economy and it looks to other measures to shore up the weakened currency amid modest inflation.

Bank Negara Malaysia (BNM) maintained its overnight policy rate (OPR) at 3.00 percent  for the fifth straight meeting, as expected by all 31 economists polled by Reuters.

“At the current OPR level, the monetary policy stance remains supportive of the economy and is consistent with the current assessment of the inflation and growth prospects,” the central bank said in a statement.

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The ringgit has been recovering its losses since hitting a 26-year low last month, but is still down about 2.3 percent  this year.

The central bank reiterated that the currency was undervalued and did not reflect Malaysia’s positive economic fundamentals and prospects.

Authorities are also calling on more state-linked firms and investment companies to repatriate and convert their incomes, which BNM said has encouraged inflows and lent support to the ringgit.

“Over the medium term, ongoing structural reforms will provide more enduring support to the ringgit,” BNM said.

The ringgit rose after the policy decision and was last up 0.6 percent.

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