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Malaysian central bank maintains key rate

The central bank of Malaysia decided to maintain its overnight policy rate at 3.25% amid sustainable growth prospects and lower inflation expectations.

The monetary policy committee of Bank Negara Malaysia said that private spending bolstered national output in the last quarter of 2017. The central bank said that it sees continued momentum for economic growth in 2018 as favorable income and labor market conditions support domestic demand and increased investments in the manufacturing and service sectors.

Global cost factors will have a small impact on inflation, which is projected to trend lower in 2018. The central bank forecasts energy and commodity prices to move higher in 2018 but at a more moderate pace compared to last year. It also projects a moderation in underlying inflation on the back of improved labor productivity and ongoing investments in capacity expansion.

"At the current level of the OPR, the degree of monetary accommodativeness is consistent with the policy stance to ensure that the domestic economy continues on a steady growth path amid lower inflation," the central bank said.