VOI - Voice of Indonesia | RRI - Radio Republik Indonesia

Malaysia's central bank on Thursday unexpectedly kept its benchmark interest rate (MYINTR=ECI) unchanged, signalling worries about economic growth after four consecutive rate hikes last year.

Bank Negara Malaysia held the overnight policy rate at 2.75%. All but one of 27 economists polled by Reuters had expected the bank to raise the rate to 3%.

"Today's decision allows the monetary policy committee to assess the impact of the cumulative past overnight policy rate (OPR) adjustments, given the lag effects of monetary policy on the economy," Bank Negara Malaysia said in a statement.

Future monetary policy moves would depend on both domestic inflation and the growth outlook, it said.

The central bank flagged downside risks to the economy, including geopolitical tensions, weaker growth in advanced economies and a sharp tightening in financial market conditions. Headline inflation has peaked, it said.

The central bank has increased interest rates by a total of 100 basis points since last May from a historic low of 1.75%, as it looked to rein in inflation.

"BNM's move suggests that they are getting increasingly worried about the near-term downside risks to growth stemming from the slowdown in the advanced economies," said Khoon Goh, head of Asia research at ANZ.

Malaysia's economy has recovered strongly from a pandemic-induced slump but is expected to moderate this year amid a global slowdown.

The central bank has said growth in 2022 likely surpassed the government's 6.5%-7% forecast, but would drop to 4%-5% this year.

Capital Economics said it now expects the Malaysian central bank to hold interest rates unchanged for the rest of the year, and begin cutting in 2024.

"With growth set to slow and inflationary pressures easing, we think today's hold represents an end, rather than just a pause, to the tightening cycle," said Shivaan Tandon, emerging Asia economist at Capital Economics. (Reuters)