
KUALA LUMPUR - Malaysia's central bank kept its benchmark interest rate unchanged at its first policy meeting for the year on Wednesday, as economic growth remains strong and inflation stays under control.
Bank Negara Malaysia maintained its overnight policy rate at 3.00%, where it has been since May 2023, in line with market expectations the central bank will stand pat on rates until at least the end of 2025.
The central bank said at the rate's current level, the monetary policy stance remains supportive of the economy and is consistent with the current assessment of inflation and growth prospects.
"Strength in economic activity is expected to be sustained in 2025, driven by resilient domestic expenditure," the central bank said in a statement. Malaysia's full-year economic growth is expected to come in at 5.1% in 2024, picking up from 3.6% growth in 2023 and within the government's projected range of 4.8% to 5.3% expansion, according to official advanced estimates.
The economy likely grew 4.8% year-on-year in the fourth quarter of 2024, slower than the 5.3% in the previous three-month period, the statistics department said in preliminary estimates.
The government and central bank forecast the economy to expand between 4.5% and 5.5% in 2025.
The central bank said going into 2025, inflation is expected to remain manageable, amid the easing global cost conditions and the absence of excessive domestic demand pressures.
Malaysia's consumer price index rose 1.7% in December from a year earlier. The annual inflation rate for 2024 was 1.8%, compared to 2.5% in 2023, government data showed on Wednesday.
The central bank has cautioned that the inflation outlook remains subject to the impact of government policies as well as global commodity prices and financial market developments. Last year, the government cut costly blanket subsidies for diesel, electricity and chicken, among others, and plans to extend the policy to a widely used transport fuel in the middle of 2025.