RTTNews - Wednesday, Malaysia's central bank retained its overnight policy rate unchanged at 2%, in line with economists' expectations.

The Bank Negara Malaysia held its key rate at 2% for the third straight rate-setting session.

The central bank in April stopped cutting its key interest rate after a cumulative reduction of 150 basis points between November 2008 and February 2009.

With the current low interest rates and with the fiscal stimulus gaining traction, the prevailing policy measures are sufficient to provide support to economic activity, the central bank said in a statement.

The apex bank noted that conditions in the domestic economy have shown signs of stabilizing in the second quarter. Improvements in labor market conditions and business and consumer sentiments are expected to provide support to domestic demand.

Malaysia's inflation turned negative in June. The central bank said the negative inflation is expected to be temporary and is projected to turn positive as domestic economic conditions improve.

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