Malaysia Interest Rate2004-2021 Data | 2022-2023 Forecast | Calendar | Historical

Bank Negara Malaysia left its key overnight policy rate unchanged at a record low of 1.75 percent on May 6th 2021, amid resurging coronavirus infections and in line with expectations. The monetary policy committee said the latest indicators showed continued improvements in economic activity in the first quarter and into April. Recently, movement restrictions were reimposed at the local level with near-term effects in the economy but growth projections are seen improving, driven by stronger global demand and private sector expenditure, policymakers said. The bank added that growth will be supported by existing and new manufacturing plants, mostly in the electrical and electronics sector, as well as oil and gas. The central bank projects headline inflation to spike in Q2, in particular, due to baseline effects, and average higher between 2.5 percent and 4.0 percent through the rest of the year mainly on higher oil prices.

Bank Negara Malaysia held its key overnight policy rate unchanged at 1.75% on March 4th 2021, as widely expected. The central bank said the latest indicators point to improvements in external demand and continued consumer spending. While the re-imposition of containment measures will affect growth in Q1, the impact is expected to be less severe than that experienced in Q2 of 2020. Going forward, growth is projected to improve from the second quarter onwards, driven by the recovery in global demand, increased public and private sector expenditure amid continued support from policy measures and more targeted containment measures. The inflation is projected to average higher, primarily due to rising global oil prices. In terms of trajectory, headline inflation is anticipated to temporarily spike in the second quarter of 2021 due to the lower base from the low domestic retail fuel prices in the corresponding quarter of 2020, before moderating thereafter.

Bank Negara Malaysia left its key overnight policy rate unchanged at 1.75% on January 20th 2021, compared to market forecasts of a 25bps cut. The central bank said the resurgence in local COVID-19 and the introduction of targeted containment measures has affected the recovery in Q4. Economic growth for 2020 is expected to be near the lower end of the earlier forecasted range, while for 2021 the impact of virus curbs will be less severe than in 2020. The growth is projected to improve from Q2, led by a recovery in global demand, turnaround in public and private spending, and higher output from manufacturing and mining, with the roll-out of vaccines also lifting sentiments. Meantime, 2021 headline inflation is projected to higher, primarily due to rising oil prices. The bank remains committed to utilizing its policy levers as appropriate to create conditions for a sustainable economic recovery.

Bank Negara Malaysia left its key overnight policy rate unchanged at 1.75 percent on November 3rd, 2020, as widely expected. The central bank said the current monetary policy stance remains accommodative given the outlook for growth and inflation. The board added that the cumulative 125bps reduction in the key interest rate so far this year will continue to provide stimulus to the economy. Policymakers expect the economic recovery in Malaysia to continue into 2021, underpinned by the recovery in global demand, turnaround in public, and private sector expenditure amid continued support from policy measures. However, the pace of recovery will be uneven across sectors, with economic activity in some industries remaining below pre-pandemic levels, and a slower improvement in the labor market. This outlook is still subject to downside risks, particularly from ongoing uncertainties surrounding the course of the pandemic domestically and globally.