The Central Bank of Malaysia lowered its benchmark interest rate by 25 bps to 3.0 percent on May 7th 2019, as widely expected. It is the first rate cut since July 2016. Policymakers said that the decision is consistent with the monetary policy stance of supporting a steady growth path amid price stability and it is intended to preserve the degree of monetary accommodativeness. The Committee added that they will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation. Policymakers also noted a moderated economy activity in the first quarter of the year and a rise in the inflation rate (0.2 percent in March from -0.4 percent in February). The annual inflation rate is projected to remain low mainly due to policy measures including price ceiling on domestic retail fuel prices and changes in consumption tax policy. Interest Rate in Malaysia averaged 3 percent from 2004 until 2019, reaching an all time high of 3.50 percent in April of 2006 and a record low of 2 percent in February of 2009.
Interest Rate in Malaysia is expected to be 3.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Malaysia to stand at 3.50 in 12 months time. In the long-term, the Malaysia Interest Rate is projected to trend around 3.50 percent in 2020, according to our econometric models.