Analyst: BNM will keep borrowing rates unchanged for now

Jameel-Ahmad

KUALA LUMPUR: Bank Negara Malaysia is likely to keep its borrowing rates unchanged for now despite expecting slightly higher economic growth in 2017, said ForexTime (FXTM) today.

FXTM vice-president of corporate development and market research Jameel Ahmad said the central bank was not expected to follow in the footsteps of the US Federal Reserve by raising interest rates higher over lingering economic uncertainties.

“The economic uncertainties are still mostly led by external factors and lower borrowing rates at 3.0% should play a role in supporting the domestic economy.

“Another reason why it is difficult to envisage another cut in borrowing rates is because inflation pressure is building up in Malaysia,” Jameel said in a statement today.

Bank Negara Malaysia left the overnight policy rate unchanged at 3.0% at the second of its six scheduled meetings this year.

The central bank cut the benchmark interest rate by 25 basis points in July 2016.