Kuala lumpur: Bank Negara Malaysia (BNM) has maintained its Overnight Policy Rate (OPR) at 2.75 per cent today, marking the seventh consecutive period of stability.
According to BERNAMA News Agency, the central bank issued a statement indicating that, at the current OPR level, the Monetary Policy Committee (MPC) finds the monetary policy stance to be appropriate. This stance aligns with the outlook for continued price stability and sustainable economic growth. The MPC remains vigilant, monitoring ongoing developments and assessing the balance of risks concerning domestic inflation and growth outlooks.
The central bank highlighted that recent indicators suggest broadly resilient global growth, driven by strong global tech expansion and improving supply conditions and prices of key commodities. For Malaysia, the latest developments indicate resilient growth in the second quarter, spurred by sustained domestic demand and stronger-than-expected export performance.
BNM acknowledged that the ongoing uncertainties surrounding the West Asia conflict could impact domestic inflation and growth outlooks. However, Malaysia's strong fundamentals are expected to support the economy's resilience against external shocks. Employment, wage growth, and policy measures will continue to bolster household spending.
Investment activity in Malaysia is anticipated to be driven by the progress of multi-year projects in both the private and public sectors, implementation of new smaller-scale public projects, continued high realisation of approved investments, and the ongoing execution of national master plans. The external sector is expected to benefit from improved global prospects and robust demand for electrical and electronics (E and E) products.
BNM forecasts additional support from the rebound in non-E and E exports and sustained tourist spending. The growth projection for 2026 is firmly set within the forecast range of four to five per cent. Nonetheless, this outlook faces downside risks from a prolonged conflict in West Asia and lower commodity production. Upside growth potential could emerge from a better global growth outlook, following a de-escalation of the conflict, stronger E and E goods demand, and increased tourism activity.
BNM reported that headline and core inflation in the first five months of the year averaged 1.7 per cent and 2.1 per cent, respectively, aligning with expectations. This reflects some initial pass-through of higher global cost pressures. Developments surrounding the West Asia conflict remain fluid, with elevated global commodity prices potentially exerting upward inflationary pressure.
Despite these pressures, the impact on both headline and core inflation in 2026 is expected to remain contained, thanks to domestic policy measures and stable demand conditions, which will mitigate the transmission of external cost pressures to domestic prices. Downside risks to global growth persist due to continued uncertainties surrounding the conflict, tighter global financial conditions, and concerns over financial market valuations.
BNM also identified upside potential from quicker-than-expected recovery in supply chain conditions, stronger tech spending, and pro-growth policy measures in key economies. Following today's decision, BNM is slated to hold two remaining MPC meetings this year to review the OPR, which has been held at 2.75 per cent since July 9, 2025.