During the early part of the forecast period Bank Negara Malaysia (BNM, the central bank) will proceed with the normalisation of monetary policy by pushing up its main policy interest rate, the overnight policy rate (OPR). BNM has raised the OPR three times since March 2010, by a total of 75 basis points, bringing the rate to 2.75%; the bank had previously cut the OPR to a record-low level in response to the dramatic downturn in the Malaysian economy that occurred in 2009. However, the recent sharp appreciation of the country's currency, the ringgit, and signs of slowing economic growth suggest that BNM will not push up interest rates sharply in the coming quarters. As the bank believes that inflation will not rise to problematic levels in 2011, we do not expect the OPR to be raised this year to a level higher than the rate of 3.5% at which it stood during 2007 and much of 2008. Nevertheless, as the pace of domestic demand growth quickens in 2012-15 relative to the rate that it is expected to reach in 2011, BNM is likely to lift interest rates in order to contain inflationary pressures.