BNM keeps OPR unchanged at 3.25%

The central bank said the current stance of monetary policy remained accommodative and supportive of economic activity.

"Recent indicators suggested continued expansion in economic activity in the third quarter despite ongoing adjustments to external and domestic developments.

"Private consumption is expected to moderate as households continue to adjust to the implementation of the Goods and Services Tax (GST) and the more uncertain economic environment," said Bank Negara in a statement today.

For household spending, the central bank said it would, however, be supported by wage growth and stable labour market conditions.

It expected capital spending in the manufacturing and services sectors, as well as, ongoing infrastructure projects would led investment activity, while continued expansion in domestic demand to contribute towards mitigating the weak performance of the external sector.

BNM said the downside risks to growth, however, had risen amid greater uncertainty on both the global and domestic fronts.

"The committee recognises that there are heightened risks in the global economic and financial environment. These risks are being carefully monitored to assess their implications on macroeconomic stability and the prospects of the Malaysian economy.

"This is to ensure that the monetary policy stance is consistent with the sustainability of the overall growth prospects," it said.

The central bank said Malaysia was entering this challenging period from a position of strength, given the diversified sources of growth of the economy, low unemployment level, manageable level of external indebtedness, and a well-capitalised banking system.