OPR unchanged at 2.75pct as BNM cites resilient demand, stable prices

 

Bank Negara Malaysia’s Monetary Policy Committee (MPC) today decided to maintain the overnight policy rate (OPR) at 2.75 percent, citing resilient domestic demand, steady inflation and a positive growth outlook.

The central bank noted that the Malaysian economy expanded by 4.4 percent in the first half of 2025 and remains on course to grow between four and 4.8 percent for the year.

Growth is expected to continue into 2026, underpinned by household spending, wage growth and ongoing private and public sector investments.

"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 the national master plans and the 13th Malaysia Plan (13MP)," it said in a statement.

Risks still remain

Although global growth has been buoyed by sustained consumer spending and the easing of trade uncertainties, BNM added that on the external front, risks still remain from geopolitical tensions and potential tariff escalations.

At the same time, it said that favourable outcomes from trade negotiations and pro-growth policies in major economies could lend further support.

"This outlook remains subject to uncertainties, in particular surrounding global developments. Downside risks to the growth outlook remain from slower global trade, weaker sentiment, as well as lower-than-expected commodity production.

"Meanwhile, favourable outcomes from remaining US trade negotiations, pro-growth policies in major economies, continued demand for electrical and electronic goods, and robust tourism activity could raise Malaysia’s export and growth prospects," it added.

Inflation pressures remain contained, with headline inflation averaging 1.4 percent and core inflation 1.9 percent in the first seven months of the year.

The central bank expects inflation to stay moderate into 2026 amid easing global commodity prices and stable domestic demand conditions.

"At this OPR level, the MPC considers the monetary policy stance to be appropriate and supportive of the economy amid price stability," it said. - Mkini