Malaysia’s Inflation Rate Holds at Lowest Since February 2010
Malaysia’s inflation rate held at the lowest in more than two years in November, giving the central bank scope to keep interest rates steady and support growth.
Consumer prices rose 1.3 percent from a year earlier, after climbing at the same pace in October, the Putrajaya-based Statistics Department said in a statement today. The median of 18 estimates in a Bloomberg News survey was for a 1.4 percent gain.
The World Bank said today most policy makers in East Asia’s emerging nations should keep interest rates steady as economic growth is poised to accelerate next year without spurring inflation. Bank Negara Malaysia has maintained borrowing costs at 3 percent for nine consecutive meetings and said last month price gains are expected to remain “modest” in 2013.
“Malaysia is in a sweet spot and Bank Negara can keep the key rate unchanged for a while,” Jackit Wong, a Hong Kong-based economist at Natixis Asia Ltd., said before the report. “Malaysia’s economy will likely remain solid, continuously supported by firm domestic consumption and strong investment.”
Malaysia’s interest rates are “roughly in line” with those suggested by the Taylor rule, the World Bank said today. John Taylor, an economist at Stanford University, published in 1993 an interest-rate formula, which measures where a central bank should set its policy rate based on inflation and growth.
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