12 Jul 2013 11:19

KUALA LUMPUR, July 11 (Bernama) -- Bank Negara Malaysia (BNM) has maintained the Overnight Policy Rate (OPR) at 3.0 per cent, the central bank said after its Monetary Policy Committee (MPC) meeting today.

It said while domestic demand in emerging economies remained an important source of growth, the prolonged weakness in the external environment had begun to affect domestic economic activity in these economies.

Although global monetary conditions remain highly accommodative, financial market volatility has increased substantially in the recent period as markets reassessed the direction of the policy, it said in a statement.

For the Malaysian economy, domestic demand has continued to support growth amid the continued moderation in external demand.

The sustained weakness in the external sector may, however, affect the overall growth momentum.

Going forward, private consumption is expected to remain steady underpinned by income growth and stable labour market conditions.

Bank Negara said capital spending in domestic-oriented industries and the ongoing implementation of infrastructure projects would also support investment activities.

It said inflation remained low at 1.6 per cent in the first five months of the year but was expected to rise modestly in the second half of the year, due to domestic supply and cost factors.

Pressures from global commodity prices were also likely to be contained given the moderate global growth prospects.

The central bank said the MPC considered the current stance of monetary policy to be appropriate given the outlook for inflation and growth.

"In addition to domestic conditions, the MPC will continue to carefully assess the global economic and financial developments and their implications on the overall outlook for inflation and growth of the Malaysian economy," it added.