Malaysia left its key interest rate unchanged for a fourth straight meeting as a weakening currency reduces scope for the central bank to join global counterparts in monetary easing.
Bank Negara Malaysia kept the overnight policy rate at 3.25%, it said in a statement in Kuala Lumpur Thursday. The decision was predicted by all 19 economists surveyed by Bloomberg News.
The Malaysian ringgit is Asia’s worst-performing currency in the past six months as a slump in crude prices spurred investor concern the oil-exporter’s finances will be hurt. With above-5% growth and inflation at the slowest since 2009, Bank Negara won’t be in any hurry to join more than a dozen central banks adding stimulus so far this year, analysts said.
“The risk between growth, inflation and financial stability, they are all finely balanced,” Weiwen Ng, a Singapore-based analyst at Australia & New Zealand Banking Group, said before the decision. “The base case is for Bank Negara to remain on hold for the rest of 2015.”
The ringgit fell to a six-year low on Thursday, extending the drop in the past six months against the US dollar to about 13%, according to data compiled by Bloomberg. The currency is undervalued and should return to its fundamentals, central bank Governor Zeti Akhtar Aziz said last month.
Bank Negara raised the benchmark rate in July after growth quickened and as it sought to curb the risk of financial imbalances. Bond investors, who have been pricing in another increase, are now paring previous bets for higher rates.