KUALA LUMPUR: Bank Negara Malaysia has kept the Overnight Policy Rate (OPR) unchanged at 2.75%, the level it was cut to in July 2025, in line with market expectations.
All 22 economists surveyed by Bloomberg had anticipated the central bank to maintain the rate at 2.75%.
The central bank, in a statement, said that at the current OPR level, the Monetary Policy Committee (MPC) considers the monetary policy stance to be appropriate and supportive of the economy amid stable prices.
“The MPC will continue to monitor ongoing developments and assess the balance of risks surrounding the outlook for domestic growth and inflation,” it said.
Bank Negara said the latest indicators point to a continued expansion in global growth. While higher tariffs are expected to weigh on global activity, the outlook remains supported by resilient labour markets, moderating inflation, and the gradual easing of monetary and fiscal policies worldwide.
The conclusion of several trade negotiations has also helped to ease global uncertainties to some extent..
“Downside risks remain, arising from potentially higher tariffs, especially product-specific ones, and escalation in geopolitical tensions.
“Additionally, there are concerns over the elevated valuations in financial markets. Upside potential includes a milder tariff impact on economic activity and pro-growth policies in major economies,” it said.
Bank Negara said that for Malaysia, the latest developments point to better-than-expected growth in the third quarter, supported by sustained domestic demand, resilient electrical and electronics (E&E) exports, and a recovery in commodity production.
“Looking ahead, resilient domestic demand will continue to support growth going into 2026. Employment, wage growth and income-related policy measures will remain supportive of household spending.
“The expansion in investment activity will be driven by the progress of multi-year projects in both the private and public sectors, the continued high realisation of approved investments, as well as the ongoing implementation of catalytic initiatives under national master plans and the Thirteenth Malaysia Plan (RMK13),” Bank Negara said, adding that measures under Budget 2026 will also support growth.
The growth outlook remains subject to external uncertainties, particularly from slower global trade, weaker sentiment, and lower-than-expected commodity production.
Meanwhile, upside potential to growth could arise from a better global growth outlook, stronger demand for E&E goods, and robust tourism activity.
Year-to-date, headline and core inflation averaged 1.4% and 1.9%, respectively.
Moving forward, Bank Negara said headline inflation is expected to remain moderate in 2026, supported by continued easing in global cost pressures.
Modest global commodity prices are also expected to help keep domestic cost conditions contained, it said.
“Meanwhile, core inflation in 2026 is expected to remain stable and close to its long-term average, reflecting continued expansion in economic activity and the absence of excessive demand pressures.
“In this environment, the overall impact of the implemented domestic policy reforms on inflation in 2026 is expected to be limited,” Bank Negara said.
