Malaysia's central bank on Thursday decided to retain the key interest rate at 3 percent as expected, saying that the current policy stance is appropriate given the expectations for robust economic growth and modest inflation.
The Monetary Policy Committee of Bank Negara Malaysia said it considers "the current stance of monetary policy to be appropriate given the outlook for inflation and growth."
The central bank's last policy change was in May 2011, when it hiked the interest rate by 25 basis points to the current level.
The MPC said though inflation is seen rising during the year, the expectation is for it to remain modest. Higher global prices of selected food commodities and domestic factors are expected to increase costs and contribute to higher prices.
Nevertheless, in line with modest global growth prospects, pressures from global commodity prices are expected to be contained, the MPC noted.
Further, the MPC noted that in the domestic economy, the latest indicators point to robust investment activity and continued expansion in private consumption. The external sector is also expected to improve and provide additional support to the economy, it noted.
The MPC said the global economy continued to be confronted with some uncertainties. While there have been improvements in the advanced economies, risks to sustained recovery remain, it cautioned.
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