Malaysia's Current Economic Situation, Central Bank Rates

Malaysia March CPI hit a 13-month high of 2.8% y/y as compared to a 2.7% rise in February, and slightly lower than the median f/c of 3.0%. S/adj, the CPI for March was unchanged from Feb. The increase in March prices was mainly due to steeper prices of food and nonalcoholic drinks, which rose 4.9% y/y, for alcoholic beverages and tobacco prices rose 9.0% y/y.

Housing, water, electricity and fuels, which is the second-largest component in the CPI, rose a modest 1.3% y/y. Malaysian inflation has crept up since late last year but remains among the lowest in South East Asia, thanks largely to price controls on essential goods such as flour and cooking oil. Core inflation also looks reasonably stable on the month, at just over 2% thus allowing the central bank to leave rates unchanged at 3.5% next week.