Our Bank Negara announced the Overnight Policy Rate remains unchanged at 2% today. The meeting committee claimed that the monetary policy will remain accommodative to ensure the economic recovery is well entrenched.
Even though Malaysia economy is expected to expand further in 2010 and the growth being supported by strengthening domestic demand, the change largely reflects the lapse of the impact from the adjustment to retail fuel prices in 2008, as well as the absence of further price revisions and external influences.
Anyway, they will need to ensure the stance of monetary policy is appropriate to prevent the build up of financial imbalances by keeping the same interest rates. I'm expecting the interest rate to be upgraded of 25 points by 2Q or 3Q10, depends on the economy situation.
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