CENTRAL BANK EXPECTS BULLISH DOMESTIC ECONOMIC PROSPECTS, SAYS OSK

KUALA LUMPUR, Sept 3 (Bernama) -- Bank Negara Malaysia (Malaysia's Central Bank)
expects the domestic economic prospects, notably the private consumption and
private investment, to be relatively more bullish, said OSK Research in its note
Friday.

It said the Central Bank, in announcing its decision to maintain its overnight
policy rate at 2.75 per cent Thursday, also mentioned that the domestic economic
condition was supported by the favourable labour market conditions, positive
consumer sentiments as well as the low inflation and conducive credit
environment.

Meanwhile, Kenanga Research said the Central Bank would continue to tone down
its 'normalisation' mantra and closely monitor the global economic trend.

"We believe BNM (the Central Bank) would take a more cautious stance before
deciding to resume its rate normalisation policy," it said in its 'Economic
Viewpoint' here Friday.

Kenanga said this would be dependent on the growth outlook for second half of
2010 and beyond as global growth momentum was expected to wither.

"Nevertheless, we expect BNM may incline to resume its normalisation rate mode
from H2 of 2011 on the expectation that the domestic demand strengthens further
and the global economy growth stabilises," it said.

It said the Central Bank may raise interest rates again by up to 50 basis points
in second half financial year 2011.
-- BERNAMA



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