Bank Negara Malaysia (BNM) kept its benchmark interest rate unchanged on Thursday, expecting progress in the vaccination rate and the gradual easing of coronavirus restrictions to underpin growth.

The central bank held its overnight policy rate steady at a record low of 1.75 percent, after having cut them by a total of 125 basis points last year.

While Malaysia’s downgrade to its 2021 growth outlook last month fuelled some market speculation of...