Malaysia keeps Interest rate steady

Malaysia’s central bank left its benchmark interest rate unchanged in the first policy meeting under a new governor, providing support to an economy that Prime Minister Mahathir Mohamad is trying to revamp. Bank Negara Malaysia held the overnight policy rate at 3.25 percent, it said in a statement in Kuala Lumpur on Wednesday, as predicted by all 19 economists in a Bloomberg survey. Governor Nor Shamsiah Mohd Yunus has ample room to keep policy unchanged despite an emerging-market sell-off that’s forced her counterparts in Indonesia and the Philippines to take more aggressive steps to defend their currencies. The inflation outlook remains benign in Malaysia after the government scrapped a consumption tax, while economic growth may ease as Mahathir cuts back on spending to rein in government debt. “The Malaysian economy is expected to remain on a steady growth path,” the central bank said in its statement. At the current interest rate, “the degree of monetary accommodativeness is consistent with the intended policy stance,” it said. (Bloomberg)