Bank Negara Malaysia kept the overnight policy rate at 3% amid stable core inflation and steady economic growth.
The central bank said Jan. 19 that headline inflation averaged 2.1% in 2016 and is expected to average higher in 2017. Underlying inflation, as measured by the core inflation index is expected to remain stable.
Banking sector liquidity remains amply and financial institutions continue to operate with strong capital and liquidity buffers.
The central bank said that risks of destabilizing financial imbalances are contained, but added that it will continue to monitor these risks.