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Bank Negara Malaysia holds key rate as growth is solid

[KUALA LUMPUR] Malaysia's central bank left its benchmark interest rate unchanged on Thursday as expected, as it sees the economy remaining on a solid growth track while inflation moderates.

All 11 economists polled by Reuters had predicted no change to Bank Negara Malaysia's (BNM) overnight policy rate , which has been held at three per cent since July 2016.

"At the current level of the OPR, the stance of monetary policy remains accommodative," the central bank said in a statement.

BNM said economic growth will be driven by domestic demand, supported by improving incomes and overall labour market conditions, new and ongoing infrastructure projects and sustained investments in the manufacturing and services sectors.

In the first half, the economy expanded 5.7 per cent from a year earlier.

Annual headline inflation eased to 3.2 per cent in July, slowing for a fourth straight month after hitting an eight-year high of 5.1 per cent in March.

In July 2016, the central bank cut the key rate by 25 basis points in the immediate aftermath of Britain's Brexit vote.