Malaysia snubs interest rate hike

The current 3% level is expected to stand pat for the remainder of 2012.

According to BBVA Research, Bank Negara Malaysia (BNM) held interest rates steady at 3% today, as expected, for an eighth consecutive month. With a better-than-expected growth outturn of 5.4% y/y in 2Q, the Malaysian economy is so far weathering the global downturn relatively well, along with its other Southeast Asian neighbors.

"Nevertheless, the BNM said that it will continue to carefully assess "the considerable uncertainties in the global economic and financial conditions" and their implications on the overall outlook for inflation and growth, suggesting that it will stand ready to step in to provide policy support as needed. We expect rates to stay at the current 3% level for the remainder of 2012," BBVA noted.