Malaysia seen keeping policy rate unchanged on economic risks

[KUALA LUMPUR] Malaysia's central bank is expected to keep its key interest rate unchanged at 3.25 per cent at a policy meeting on Wednesday, as the country's economy remains at risk from a slump in oil prices and a weakened currency, a Reuters poll showed.

In 2014, economists had predicted that Bank Negara would likely raise interest rates by another 25 basis points after a July hike. However, that forecast has now changed after global oil prices fell by more than half in the last four months.

The ringgit depreciated by 6.3 per cent against the dollar in 2014, ranking as the worst performer among emerging Asian markets.

Most economists now expect the central bank to stand pat for the rest of 2015, unless Malaysia's economy improves in the second half of the year.

REUTERS