KUALA LUMPUR, April 27: Malaysia’s central bank on Friday kept its key interest rate unchanged at 3.50pc amid expectations of sustained economic growth and low inflation.

The central Bank Negara said its monetary policy committee had decided to leave the overnight policy rate at 3.50pc.

“The current level of the policy rate remains consistent with the medium term outlook of relatively low and stable inflation and sustainable economic growth,” it said in a statement.

The bank said it expected moderate growth in the United States, which would in turn lead to a moderation in Malaysia’s export growth in the first half of 2007, but said economic growth would be sustained by domestic demand.

On the outlook for inflation, the central bank said there continued to “be a lack of underlying inflationary pressures in the economy.”

Bank Negara last month said average inflation for 2007 was expected to be lower at between 2.0 and 2.5pc compared to 3.6pc in 2006 due to moderating oil prices.

“The expectation going forward is that the average rate of inflation for the year would remain within the forecasted range of 2.0 to 2.50pc,” it said on Friday.—AFP