KUALA LUMPUR: Bank Negara has maintained the overnight policy rate (OPR) at 2.75%, in line with market expectations, after keeping the benchmark rate unchanged for the past year.
The central bank last adjusted the OPR in July 2025, when it cut the rate by 25 basis points to 2.75%.
According to a Bloomberg survey, all 25 economists polled unanimously expect Bank Negara to keep the OPR unchanged at 2.75% at its third Monetary Policy Committee (MPC) meeting of the year.
“At the current OPR level, the MPC considers the monetary policy stance to be appropriate and consistent with the outlook of continued price stability and sustainable economic growth.
“The MPC will remain vigilant to ongoing developments and assess the balance of risks surrounding the outlook for domestic inflation and growth,” Bank Negara said in a statement.
The central bank acknowledged uncertainties arising from the ongoing conflict in the Middle East, noting that the impact on the global and Malaysian economies will depend on how the situation develops.
Bank Negara said global growth remained resilient in the first quarter of 2026, supported mainly by sustained domestic demand and continued expansion in the global technology sector.
However, sharp increases in energy and commodity prices, as well as supply chain disruptions arising from the Middle East conflict, are beginning to weigh on global growth momentum.
It said downside risks to global growth remain elevated due to uncertainties surrounding the duration and severity of the conflict, tighter global financial conditions, and concerns over valuations in financial markets.
Upside potential includes de-escalation of the conflict, leading to improved supply chain conditions, stronger tech spending and pro-growth policy measures in key economies.
For Malaysia, Bank Negara said the latest indicators point towards continued growth momentum in the first quarter, driven by sustained domestic demand and strong export performance.
“Moving forward, uncertainties surrounding the duration and severity of the Middle East conflict will affect the outlook of domestic growth and inflation. Nevertheless, Malaysia’s strong fundamentals will continue to underpin the economy’s resilience,” it said.
Employment, wage growth and policy measures will continue to support household spending. Investment activity will be driven by the progress of multi-year projects in both the private and public sectors, the implementation of new, smaller-scale public projects, continued high realisation of approved investments, as well as the ongoing implementation of national master plans
The external sector will benefit from continued strength in electrical and electronics (E&E) exports, while tourist spending will be sustained, albeit at a more moderate pace.
Bank Negara said the growth outlook remains subject to downside risks from a prolonged conflict in the Middle East and lower commodity production.
Meanwhile, upside potential could arise from a de-escalation of the conflict, stronger demand for E&E goods, and higher tourism activity.
“Headline and core inflation averaged 1.6% and 2.1% in the first quarter of 2026, respectively. Higher global commodity prices arising from the Middle East conflict are expected to raise domestic cost pressures, causing inflation to edge higher,” the central bank said.
Nevertheless, the impact on both headline and core inflation in 2026 is expected to remain contained, reflecting domestic policy measures and stable demand conditions, which will mitigate the pass-through of external cost pressures to domestic prices.
