KUALA LUMPUR, March 9 — Malaysia’s central bank on Thursday kept its benchmark interest rate unchanged for the second consecutive meeting, flagging concerns over an expected slowdown in global growth.

Bank Negara Malaysia (BNM) kept its overnight policy rate at 2.75 per cent, as expected by 16 of 27 economists polled by Reuters.

In January, BNM unexpectedly kept the rate unchanged, citing worries over economic growth after four straight rate hikes last year.

On Thursday, BNM said Malaysia’s growth was expected to moderate in 2023 amid cooling global demand.

"Downside risks continue to stem mainly from global developments, including from weaker-than-expected growth outturns or much tighter and more volatile global financial conditions,” the central bank said in a statement.

Malaysia’s economy will remain driven by domestic demand, improvements in employment and income prospects, and an uptick in tourist arrivals, BNM said.

The government expects economic growth of 4.5 per cent this year, down from a 22-year high of 8.7 per cent last year.

Last year, BNM increased rates by a total of 100 basis points from a historic low of 1.75 per cent as it sought to tame inflation amid robust growth.

Inflation was expected to average between 2.8 per cent-3.8 per cent in 2023, compared with 3.3 per cent last year.

Malaysia’s consumer price index (CPI) in January rose 3.7 per cent from a year earlier, versus a 3.8 per cent pace in December. Inflation has been slowly moderating since hitting 4.7 per cent last August.

BNM said its monetary policy committee remained "vigilant to cost factors, including those arising from financial market developments, that could affect the inflation outlook.”

"Further normalisation to the degree of monetary policy accommodation would be informed by the evolving conditions and their implications to the domestic inflation and growth outlook,” it said.

"The MPC will continue to calibrate the monetary policy settings that balance the risks to domestic inflation and sustainable growth.” — Reuters