KUALA LUMPUR, March 4 (Reuters) – Malaysia’s central bank maintained its benchmark interest rate at its lowest level on Thursday in anticipation of the recently launched COVID-19 vaccination program helping to boost consumer sentiment -uspower and promote business, which is the foundation for economic recovery.
Bank Negara Malaysia (BNM) left its policy rate overnight unchanged at 1.75%, as expected by most analysts in a Reuters poll.
While coronavirus loops introduced in January would hit growth in the first quarter, the central bank expected to pick up from the second quarter thanks to a decline in global demand, more private and public spending and ongoing policy support.
“The rollout of the domestic COVID-19 vaccine program will also raise sentiment and economic activity,” BNM said in a statement.
BNM held rates for a fourth straight meeting after cutting by 125 basis points last year, the last in July.
“The MPC considers the monetary policy stance to be appropriate and appropriate,” said BNM.
Malaysia’s economy traveled 5.6% in 2020, the biggest full-year contraction in more than two decades, as the government imposed tight loops of coronavirus for most of last year to try to combat the disease accidental containment.
Authorities now hope the COVID-19 vaccination program launched in late February will help overcome the worst economic performance from the Asian Financial Crisis.
The inoculation campaign also came at the tail end of a second national lockout, which forced some analysts to lower their 2021 growth forecasts.
Malaysia’s infection rate has since declined according to health officials, but the total number of cases has exceeded 300,000, making it the third largest in Southeast Asia after Indonesia and the Philippines .
The government in November had predicted that the economy would go down and grow 6.5% -7.5% in 2021. Finance Minister Tengku Zafrul Abdul Aziz said in February that the country was on the way to achieve this, according to local media. (Reporting by Joseph Sipalan; Editing by Ana Nicolaci da Costa)