Kuala lumpur: Following is the transcript of Bernama’s email interview with Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour on the Overnight Policy Rate (OPR).
According to BERNAMA News Agency, the Monetary Policy Committee (MPC) has decided to maintain the OPR at 2.75 percent, considering it appropriate and supportive of the economy amidst stable inflation. The Governor emphasized that the MPC’s decision is grounded in a comprehensive assessment of the Malaysian economy, taking into account both growth and inflation risks.
The Governor highlighted that key drivers of the Malaysian economy are strong, supporting a steady growth path into 2026. With resilient domestic demand, employment stability, and rising incomes, household spending is expected to remain robust. Fiscal initiatives like Sumbangan Asas Rahmah (SARA) and Sumbangan Tunai Rahmah (STR), alongside civil service salary restructuring, are set to boost disposable income and sustain consumption.
Investment activities are anticipated to continue driving growth, with a significant portion of manufacturing projects already implemented. The focus on strategic areas such as artificial intelligence, semiconductors, and energy transition, coupled with national plans like the New Industrial Master Plan 2030, is expected to support ongoing investment momentum.
Trade agreements, particularly the recent pact with the United States, provide a stable environment for businesses. Despite higher tariffs, global demand for electrical and electronics products, especially in AI, supports the export outlook. The Visit Malaysia 2026 campaign is also poised to enhance tourist arrivals and spending.
On the inflation front, headline and core inflation rates have averaged 1.4 percent and 1.9 percent, respectively, for the year. Price increases have remained manageable, with policy designs cushioning the impact on households while delivering fiscal savings. The targeted RON95 subsidy rationalization has kept inflationary impacts limited, benefiting consumers with lower retail fuel prices.
Reflecting on 2025, the Governor noted a year of heightened uncertainty due to global trade tensions and geopolitical developments. Despite challenges, Malaysia’s economy demonstrated resilience, aided by structural reforms and strategic investments. The MPC’s focus on maintaining a supportive growth environment while ensuring moderate inflation played a crucial role.
Looking ahead to 2026, the global environment is expected to remain fluid, with the full impact of higher tariffs becoming more apparent. Despite external headwinds, Malaysia’s economy is projected to stay resilient, with a GDP growth forecast of 4 to 4.5 percent. The strong economic fundamentals are expected to manage near-term pressures, maintaining a steady growth trajectory with moderate inflation.
In an uncertain global landscape, real-time data and feedback from stakeholders will guide the MPC’s efforts to navigate economic challenges, ensuring inflation remains low and stable in support of sustainable growth.