By Joseph Sipalan
KUALA LUMPUR (Reuters) - Malaysia's central bank is expected to leave monetary policy unchanged on Wednesday, as the Brexit vote has not had a significant short-term impact on the country's economy.
The benchmark rate <MYINTR=ECI> has been held steady since July 2014, when it was raised by 25 basis points to 3.25 percent.
All 13 economists in a Reuters poll predicted no change to Bank Negara Malaysia's policy rate, though some think the central bank could cut in coming months.
Suhaimi Ilias, Maybank investment bank group chief economist, said September might bring a cut as by then, the Brexit impact on global and domestic economies and markets should be clearer.
Julia Goh, Malaysia economist for UOB Bank, said "the odds of a cut in the next 6-9 months are higher, but this is very much data dependent. We will see a risk of a cut if growth goes below 4 percent."
In January, Malaysia revised its 2016 growth projection downwards to 4.0-4.5 percent from 4.0-5.0 percent on expectations of a sustained slump in global crude prices.
SLOWING GROWTH RATES
Southeast Asia's third-largest economy has seen slowing growth over the past five quarters, but steady exports and resilient private spending leave the central bank "relatively sanguine" about growth prospects, OCBC said in a note.
"Hence, more than having to consider whether there is space to ease or not, the central bank appears to think that there is not much of a need to ease to begin with," it said.
OCBC added that any shift in policy towards a rate cut would only happen if global growth prospects "darken considerably", and if exports and domestic consumption take a nose dive.
UOB's Goh agrees there is no immediate need for BNM to push for a rate cut, even if the central bank may take on a more dovish outlook.
Inflation is not a worry for the central bank. The annual pace was a seven-year high in February, at 4.2 percent, but it slowed the next three months, reaching 2 percent in May.
ANZ economist Weiwen Ng says there is "definitely an overhang" from the Brexit vote, but BNM's immediate concern would be any spike in volatility in financial markets.
The key impact on Malaysia "comes from the financial channel, and we have seen greater volatility in financial markets of late," Ng said.
(Editing by Richard Borsuk)