Malaysia's central bank held interest rates steady at 3 per cent today, surprising financial markets which had been betting on a hike, as the authorities brace for growth to slow due to weaker global demand.

Bank Negara raised the Statutory Reserve Requirement Ratio to 4 per cent from 3 per cent effective July 16.

The latest indicators point to a moderation in growth in the second quarter, the central bank said in a statement.

"Going forward, global growth will remain highly uneven across regions, with increased downside risks," Bank Negara said.

Eleven of 15 economists in a Reuters poll expected Bank Negara to raise the overnight policy rate (OPR) by 25 basis points, while seven out of 11 economists had forecast a 100 basis point increase in the bank reserves requirement. – Reuters