KUALA LUMPUR, Nov 12 — The central bank’s decision to keep interest rates on hold offers some support for growth while taking “major risks” with inflation, the Financial Times says.

The daily pointed out that Bank Negara Malaysia’s (BNM) distinctly less hawkish tone when making the announcement yesterday also suggested increasing worries about global economic growth.

“Sustained domestic demand is expected to underpin growth, but the bank is clearly concerned about the slowdown in Europe, warning that ‘critical policy issues remain unresolved and pose further downside risks to global growth’.

“Still, the bank had much less to say about inflation than has become usual, merely noting that it was expected to stabilise at the current rate of 3.4 per cent for the rest of this year before falling in 2012,” FT noted in its beyondbrics blog.

BRICS is a grouping of emerging economies Brazil, Russia, India, China and South Africa.

Despite this, the central bank was likely not yet prepared to move into full easing mode, it said.

BNM kept its key interest rate unchanged at 3.00 per cent at its last monetary policy meeting for 2011 yesterday but warned of risks to growth as some analysts predicted a possible easing next year.

It joins Bank of Korea in keeping rates on hold, even as central banks in Indonesia and Brazil have switched policy to boost growth from fighting inflation as the global slowdown threatens exports.

Inflation clocked in at 3.4 per cent in September and has been in check since June, when it touched a 27-month high of 3.5 per cent.

Food inflation, however, remains high, increasing to five per cent year-on-year in September from 4.6 per cent in August.

Some economists have already cut their forecasts for economic growth this year which the government estimates will come in at between 5.0 and 5.5 per cent.