The Monetary Policy Committee (MPC) of Bank Negara Malaysia has decided to maintain the Overnight Policy Rate (OPR) at 3.00 per cent.

In a statement today, the central bank said economic activity in advanced and emerging economies continued to improve with global trade showing a recovery.

"In this environment, Asian economies are benefiting from stronger external demand amid sustained domestic activity.

For 2017, the global economy is projected to expand at a slightly faster pace.

"Nevertheless, there remains risks to global growth arising from threats such as protectionism, geopolitical developments, heightened volatility of financial markets and negative developments in the price of key commodities," it said.

With the growth of domestic demand being sustained, the more positive contribution from the external sector will lead to a better performance of the Malaysian economy, it said.

Meanwhile, BNM said, the ringgit, along with other emerging market currencies, have continued to stabilise as the implementation of financial market development measures have had a positive impact on domestic financial markets.

"Banking system liquidity remains sufficient. Financial institutions continue to operate with strong capital and liquidity buffers and the growth of financing to the private sector is consistent with the pace of economic activity," it added.

Headline inflation was projected to be higher in 2017, reflecting primarily the pass-through impact of the increase in global oil prices on domestic retail fuel prices.

Headline inflation would remain relatively high in the first half of the year before moderating thereafter, BNM said. -- Bernama