* C.bank keeps rate at 3.00% as expected
* BNM says current stance remains accomodative
* Cut likely in Jan. 2020 on weak global demand - Continuum Economics
By Joseph Sipalan
KUALA LUMPUR, Nov 5 (Reuters) - Malaysia's central bank kept its key policy rate steady at 3.00% on Tuesday, saying it expects private sector spending to remain resilient, offsetting pressure from weaker exports.
Malaysia's latest economic indicators remain in line with expectations despite a continued slowdown in global demand, suggesting a "moderate expansion" in the third quarter, Bank Negara Malaysia (BNM) said in a statement.
"At the current level of the OPR, the stance of monetary policy remains accommodative and supportive of economic activity," it said. "Growth is expected to remain anchored by firm private sector expenditure."
Eight out of 11 economists in a Reuters poll had expected BNM to keep the rate unchanged. The other three predicted a 25 basis point cut.
Malaysia's government has forecast growth to come in at 4.7% this year, and improve slightly to 4.8% in 2020, bucking broader softening expected elsewhere.
Still, exports contracted by 6.8% in September, the biggest fall in three years, on weak demand from its major trade partners.
The September data indicates continued weakness in global demand may end up being too much of a drag to be offset by private spending alone, said Charu Chanana, an analyst with Continuum Economics.
"I had expected a rate cut today as a preemptive measure... BNM delayed it and kept some buffer for 2020 but I do think a rate cut is coming soon," Chanana said.
"We have to see how the trade talks between the U.S. and China pan out. If we still see bleak details coming out as we move forward, then I do think a rate cut is coming soon, maybe in January."
Malaysia will release its third-quarter gross domestic product data (GDP) next week. Capital Economics, which had expected a cut on Tuesday, expects growth will slow to 4.2% from 4.9% in the second quarter.
However, the government has set aside "contingency measures" in its budget for next year if the U.S.-China trade war and growing protectionist policies around the world persist.
BNM said growth is seen coming "be within projections in 2019 and the pace sustained going into 2020". It had earlier forecast 2019 growth to come in at between 4.3%-4.8%.
The central bank will likely wait and see what the growth trajectory will be like next year, especially if consumer spending will continue to grow, before deciding on a rate cut, said Bank Islam chief economist Mohd Afzanizam Abdul Rashid.
"Should consumer spending is able to maintain its above trend growth, therefore, the economy would continue to grow at a respectable rate," Mohd Afzanizam said.
Industrial production grew 1.9% in August, slower than expected but higher than the 1.2% pace a month earlier.
Annual inflation came in at 1.1% in September, slowing from the previous month, but the central bank expects the pace to pick back up over the last quarter of 2019 and into next year.
Malaysia's ringgit currency strengthened 0.1% on Tuesday after the rate announcement. It has lost 0.39% against the dollar this year. (Reporting by Joseph Sipalan; Editing by Kim Coghill)