Malaysia central bank chief says interest rate highly accommodative

[KUALA LUMPUR] Malaysia'a central bank chief said on Tuesday that the country's policy interest rate of 3.25 per cent is still "highly accommodative".

Bank Negara Governor Zeti Akhtar Aziz was speaking after Prime Minister Najib Razak lowered economic growth forecasts for 2015, and increased the government's fiscal deficit target as the fall in global crude prices has severely cut into Malaysia's earnings from oil and gas sales.

Malaysia also cut its forecast for economic growth to adjust its spending budget this year after a sharp fall in earnings from oil and gas, which also hit the ringgit currency. "Right now our monetary policy at 3.25 per cent is highly accommodative in the sense that we see significant credit growth," Zeti said.

In a November decision by its monetary policy commeittee, Bank Negara Malaysia left its overnight policy rate unchanged at 3.25 per cent, but warned that of risks to global growth that could hurt the Southeast Asian country's export-focused economy.

REUTERS