BNM seen maintaining key rate

BNM seen maintaining key rate

KUALA LUMPUR,. Bank Negara Malaysia will likely retain the overnight policy rate for 2019 due to low prevailing inflation and stable oil prices, Fitch Solutions Macro Research predicted today.

The Fitch Group unit published a report saying inflation will be contained while rising oil prices were expected to benefit the economy.

“However, lingering risks of political and policy instability remain the key downside risk to our forecast,” the research firm said.

Fitch Solutions also predicted the consumer price inflation (CPI) to decline following the government’s decision to lower the fuel price ceiling.

“This means that the central bank will likely not see a need to adjust rates to manage inflation in 2019,” read the statement.

“CPI came in at -0.7 per cent year-on-year in January primarily due to lower oil prices compared to a year ago,” it said.

The OPR is now 3.25 per cent following a 25 basis point increase by the central bank early last year.