KUALA LUMPUR, March 7 (Xinhua) -- The Malaysian Central Bank, as widely expected, on Wednesday kept its benchmark interest rate unchanged at 3.25 percent.
"At the current level of the overnight policy rate (OPR), the degree of monetary accommodativeness is consistent with the policy stance to ensure that the domestic economy continues on a steady growth path amid lower inflation," the bank said in a statement.
It also said, its monetary policy committee (MPC) will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation.
Earlier in January, the bank raised its OPR by 25 basis points to 3.25 percent, the first time in more than three years.
The bank also projected the growth in Malaysia to be sustained by the positive global growth outlook and spillovers from the external sector to the domestic economy.
"The strong growth performance in the fourth quarter of 2017 continued to be anchored by private sector spending," it said.
The bank sees domestic demand to remain the key growth driver this year, underpinned by favorable income and labor market conditions, spending on new and ongoing infrastructure projects and sustained capital investment by firms in the manufacturing and services sectors.
"With additional impetus from the external sector, growth is expected to remain strong in 2018," it added.
Despite trade tensions having risen in recently, the bank believed the risks to the global growth outlook remain balanced, pointing towards continuity in global economic expansion.
Meanwhile, Malaysia's inflation is projected to average lower this year, on expectations of a smaller effect from global cost factors.
"Global energy and commodity prices are expected to trend higher in 2018, but at a more moderate pace relative to the previous year," it said, adding that a stronger ringgit exchange rate compared to 2017 will mitigate import costs.
The bank also said, the domestic financial markets have been resilient, and the broad appreciation of the ringgit in the past year better reflects the economic fundamentals.