Malaysia's policy rate seen steady amid crude oil slump

Malaysia's policy rate seen steady amid crude oil slump

KUALA LUMPUR - Malaysia's cental bank is expected to hold its overnight policy rate at 3.25 percent on Thursday as the economy and currency remain under pressure from weak oil prices, a Reuters poll showed.

All 11 economists surveyed forecast that Bank Negara Malaysia (BNM) will maintain its policy rate at Thursday's first policy meeting of the year.

The central bank "currently does not think the expected moderation in growth this year is sufficiently sharp to justify a rate cut," HSBC said in a note this week.

At present, the central bank projects 2016 growth of 4-5 percent this year, compared with 4.5-5.5 percent for last year.

HSBC noted that the scope to cut rates is "limited by thin foreign reserves" and a recent uptick in inflation.

Annual inflation was 2.6 percent in November. The December pace will be reported on Wednesday.

Last year, Southeast Asia's third largest economy was hit by weak global prices for its energy and commodity exports and by the fall of the ringgit to 17-year lows.

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