KUALA LUMPUR: Bank Negara Malaysia has maintained the overnight policy rate (OPR) at 3.25%.
Following its monetary policy meeting today, the central bank said the current level of the OPR is consistent with the intended policy stance.
"The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation," it said.
Bank Negara said supply disruption in the mining and agriculture sectors led to more moderate growth the second quarter of 2018.
Meanwhile, demand growth remained supported by private sector activity with further impetus from net exports
Looking ahead, Bank Negara said private consumption which was boosted by the tax holiday will be driven by steady wage and employment growth.
"Investment activity is projected to be underpinned by continued capacity expansion in key sectors, particularly in the export-oriented industries, driven by favourable demand and efforts to enhance automation.
"Public sector spending however is expected to weigh on growth as thegovernment embarks on reprioritisation of expenditure."
It added that the external sector will continue to benefit from the sustained global growth momentum.
"In the immediate term, the economy faces downside risks stemming from heightened trade tensions, prolonged weakness in the mining and agriculture sectors and some domestic policy uncertainty.
"On balance, the Malaysian economy is expected to remain on a steady growth path."
Headline inflation was at 0.9% in July 2018 and is expected to edge upwards continuing into 2019, taking into consideration the impact of policy measures on domestic cost factors.
"The impact of the changes in the consumption tax policy on headline inflation will be transitory and lapse towards the end of 2019. Underlying inflation is nevertheless expected to remain relatively stable," said the central bank.
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