I don't know whether it will go up or down but one things I do know that a economic slowdown will not push up BLR. Actually it is the exact opposite and you've already pointed out the fact. The US credit crisis has forces the (US) central bank to lower interest rates to spur growth.

And I do think we have quite a brilliant central bank governor on our side, and it has several times in the past pointed out that whether BLR were to increase or decrease will depends on inflation being cost pushed or demand pulled since inflation and economic growth is often closely corelated in financial theories. If it's cost pushed, then increasing BLR to contain inflation will do more harm than good since prices will be going up regardless of BLR and the further increase in BLR will only only constrain growth. However, if it is demand pulled, then increasing BLR might be a good means to contain inflation and growth will not be too much affected.

Unless the present condition, inflation pressure is more cost pushed factor and it is my opinion that BLR will stay in the near future.

Zeti likes to say that interest rate is a tool to control "demand driven inflation". She has also countless times mentioned that raising interest rates will have to be assessed on the risk of slower growth.

The current situation is definitely not demand driven. Instead I wouldn't be surprise if the central bank relax the credit facility and concentrate more on providing an avenue to SME financing, an industry which populates like 90% of our economy.