Information about Asia and the Pacific Asia y el Pacífico
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Statement by the Staff Representative on Malaysia, February 9, 2018

Author(s):
International Monetary Fund. Asia and Pacific Dept
Published Date:
March 2018
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Information about Asia and the Pacific Asia y el Pacífico
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The information below has become available following the issuance of the staff report. It does not alter the macro-framework or the thrust of the staff appraisal.

Monetary policy. On January 25, 2018, Bank Negara Malaysia raised its overnight policy rate by 25 basis points to 3.25 percent. This policy move was a preemptive action designed to prevent the build-up of risks from interest rates being too low for a prolonged period, against the expectation of continued strength in economic activity in 2018. Staff agree that the move is appropriate, also in light of growing uncertainty regarding oil prices and, therefore, the path of inflation in 2018, as highlighted by the Monetary Policy Committee statement. The stance of monetary policy remains accommodative given the outlook on headline inflation. Markets largely expected the rate increase, and it does not alter Fund staff’s baseline projections.

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