KUALA LUMPUR – Bank Negara Malaysia (BNM) has opted to keep the Overnight Policy Rate (OPR) unchanged at 2.75% during its latest Monetary Policy Committee (MPC) meeting held today.
The central bank stated that at this level, the monetary policy stance remains suitable and continues to support economic activity while maintaining price stability. BNM emphasised that it would persist in monitoring ongoing developments and evaluating risks that could impact domestic growth and inflation.
“As of now, the committee considers the current OPR to be appropriate,” BNM said in a statement, adding that it would carefully assess the evolving balance of risks in the global and domestic environment.
Looking forward, BNM highlighted that global growth in 2025 would be underpinned by strong domestic demand, moderating inflation, robust technology investments, and supportive fiscal and monetary policies. However, the situation in the Middle East remains a key area of concern, with the central bank pointing to the uncertainty that the conflict has introduced into the global economy.
“The duration and intensity of the conflict will determine its impact on the global economy. With escalating geopolitical tensions and heightened volatility in international financial markets, downside risks have increased,” BNM said.
The central bank also flagged concerns over rising tariffs and inflated market valuations, which could affect economic stability. On the other hand, it identified upside potential from increased technology spending, lower tariff impacts, and pro-growth policies in major economies.
In terms of domestic performance, BNM noted that Malaysia’s economy grew by 5.2% in 2025, driven by strong domestic consumption, higher electrical and electronics (E&E) exports, and a thriving tourism sector. This momentum is expected to carry into 2026, with resilient domestic demand continuing to anchor growth.
“Employment, wage growth, and favourable policy measures will support household spending, while investment activity will be buoyed by ongoing large-scale projects in both public and private sectors,” BNM added. The external sector, meanwhile, will continue to benefit from the strength of E&E exports and higher tourist spending.
Despite this positive outlook, BNM acknowledged the uncertainties stemming from global developments, including the Middle East crisis. It noted that risks remain from slower global trade and weaker-than-expected commodity production, while upside growth could arise from stronger global demand for E&E products and a boost in tourism.
On inflation, BNM reported that both headline and core inflation stood at 1.6% and 2.3%, respectively, in January 2026. While it anticipates that overall headline inflation will stay moderate in 2026, it also warned of potential volatility in global commodity prices due to the ongoing geopolitical developments.
“Core inflation is expected to remain stable and close to its long-term average, with economic activity continuing to expand and no signs of excessive demand pressures,” the central bank noted.
With regards to the Middle East conflict, BNM acknowledged the heightened risks but reaffirmed Malaysia’s economic strength in navigating these challenges. The central bank highlighted that Malaysia’s strong domestic growth, sound financial sector, and resilient external position would help mitigate the impact of global uncertainties. – March 5, 2026