KUALA LUMPUR: Bank Negara ended its final monetary policy committee meeting of the year by keeping the overnight policy rate (OPR) stable at 2.75%, as was widely predicted by economists.
In a statement, the central bank said the current monetary policy stance was found to be consistent with the outlook of continued price stability and sustainable economic growth.
Bank Negara said recent indicators point to continued strength in the country's economic growth in the third quarter of 2026, underpinned by strong export performance amid sustained domestic demand.
On its outlook for 2027, Bank Negara said the economy is expected to see resilient growth due to sound fundamentals. It cited the external sector as the major drive of growth, supported by the ongoing global technology upcycle and firm tourist spending.
As for domestic demand, it said stable labour market conditions and ongoing investment activity, as well as measures under Budget 2027 would provide support to private consumption.
"This growth outlook remains subject to downside risks from a prolonged conflict in the Middle East and lower commodity production. Upside potential to growth could arise from better-than-expected global growth, stronger technology-related export demand and higher tourism activity."
Nevertheless, the central bank acknowledged rising global inflation due to higher energy costs, which are expected to remain elevated.
It said uncertainties surrounding geopolitical developments will continue to weigh on global growth amid continued inflationary pressures.
However, the impact is expected to be cushioned by sustained technology-related spending and the ongoing adaptation to supply constraints.
"Downside risks to global growth remain, stemming from prolonged geopolitical tensions as well as tighter global financial conditions from monetary policy adjustments, concerns over valuations in financial markets and fiscal vulnerabilities.
"Upside potential could come from stronger technology spending and a faster-than-expected recovery in supply chain conditions," it said.
