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Malaysia's central bank left its key interest rate unchanged on Thursday as it expects growth to gain momentum this year and inflation to remain moderate as base effect from fuel inflation dissipates. The Monetary Policy Committee left the overnight policy rate unchanged at 1.75 percent as expected. The previous change in the rate was a quarter-point reduction in July 2020. The central bank estimated 3-4 percent growth for 2021. Growth is expected to gain momentum in 2022 led by the expansion in global demand and higher private sector expenditure amid improvements in the labor market and continued policy support. ? Risks to the growth outlook, however, remain tilted to the downside, the bank said. Average headline inflation is likely to remain moderate this year as the base effect from fuel inflation dissipates, while core inflation is expected to pick up as economic activity normalises.
That said, core inflation is expected to remain modest amid the continued slack in the economy and labor market. "The MPC considers the current stance of monetary policy to be appropriate and accommodative," the bank said.
