Malaysia's central bank kept key rates steady at a policy review on Thursday, the first chaired by its new governor, saying it expects domestic consumption and growth to pick up this year. Bank Negara Malaysia (BNM) left its overnight policy rate (OPR) at 3.25 percent, as widely expected. "At the current level of the OPR, the stance of monetary policy is accommodative and supportive of economic activity," the central bank said in a statement.
Southeast Asia's third-largest economy has posted five quarters of declining growth due to weak exports and tepid domestic demand, but improved commodities production may lend support in the second half. The central bank said it expects the economy to grow 4.0-4.5 percent, slower than 5 percent last year, on continued weakness in global commodity and energy prices.
BNM said domestic demand will continue to be a key economic driver, supported by growth in wages and employment and additional disposable income from measures included in the government's 2016 Budget revision in January. Economists said the central bank will keep its options open with no pressing need to ease now, despite falling inflation.