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Bank Negara to decide on interest rate rise after assessment

KUALA LUMPUR: Bank Negara Malaysia (BNM) will undertake an assessment of prevailing conditions including inflation, risks to growth as well as the extent monetary policy supports it before deciding to raise interest rates, Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said.

"We have to monitor very carefully," she said when commenting on the outlook for interest rates, after delivering a keynote address at the Financial Inclusion Policymakers Forum here on Tuesday April 5.

On March 11, BNM decided to maintain the overnight policy rate at 2.75 per cent but raised the statutory reserve requirement to two per cent, from one per cent, effective April 1.

At the next Monetary Policy Committee meeting in May, Zeti said the central bank will monitor the nature of inflation, to determine if it is demand driven or due to supply factors and whether it is temporary or a more permanent
trend.

"An assessment will also be made to the risks to growth and the degree of accommodation, that our monetary policy needs to extend, to support it," she said. "All these factors need to be taken into consideration. We will gather the information and make an assessment at that point in time," she added. -Bernama

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