BNM likely to keep interest rate unchanged
Published on: Thursday, September 22, 2016
Kuala Lumpur: Bank Negara Malaysia (BNM) will likely keep interest rate unchanged at the current level of three per cent in the months ahead, said RHB Research."Following the cut in policy rate in July by 25 basis points (bps) Malaysia's interest rate outlook still tilts towards the downside but we believe it will likely hinge on the strength of the economy," it said in a note Wednesday.However, if the economic growth slowed more than expected, another 25 bps cut in the overnight policy rate could not be ruled out altogether in the coming meetings.
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RHB Research also envisaged the headline inflation rate to remain manageable at two-2.5 per cent for this year, compared with +2.1 per cent in 2015 despite the downturn of the property sector and elevated household debt."Prices are signalling a rebound after easing for five months since hitting a seven-year high in February as the adjustments in administered prices and higher prices of imported goods due to the weak ringgit exchange rate put pressure on prices. "These are, however, expected to be offset somewhat by tepid domestic demand while the impact from the goods and services tax is fading," it said. Stay up-to-date by following Daily Express’s Telegram channel.
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BNM said the core inflation rate also gained pace to 2.2 per cent yoy in August, from two per cent in July. – Bernama
