Kuala lumpur: Bank Negara Malaysia's (BNM) Monetary Policy Committee (MPC) has opted to keep the Overnight Policy Rate (OPR) unchanged at 2.75 percent during its recent meeting. According to BERNAMA News Agency, the central bank highlighted that current global indicators suggest a continuation of resilient economic growth, driven largely by robust expansion in global technology sectors, improving supply chain conditions, and stable labor markets.
The statement from BNM noted that while inflation rates have decreased slightly in recent months, they are anticipated to remain high due to the delayed impact of energy costs on consumer prices. The bank identified that uncertainties arising from the West Asia conflict are likely to pose challenges to global growth, though these may be offset by sustained technology-related expenditures.
BNM further explained that the global economic landscape faces potential risks from ongoing geopolitical tensions, stricter global financial conditions, and valuation concerns in financial markets. However, positive factors such as stronger technology spending, a quicker recovery of supply chain conditions, and supportive growth policies in key economies may counterbalance these risks.
The central bank emphasized that the current OPR level aligns with its goals of maintaining price stability and fostering sustainable economic growth. The MPC plans to stay alert to evolving global and domestic developments, carefully weighing the risks to inflation and growth within Malaysia.
The bank reported a 5.7 percent growth in the Malaysian economy during the first half of 2026, attributing this performance to robust export activities and stable domestic demand. BNM projects that this growth trajectory will lead to an approximate five percent annual growth for 2026, with expectations of continued resilience into 2027, supported by improved global conditions and strong demand for electrical and electronics products.
BNM also pointed out that favorable labor market conditions and ongoing investment are set to bolster domestic demand. Nonetheless, it cautioned about potential risks to growth from prolonged conflicts in West Asia and reduced commodity output.
In terms of inflation, the bank disclosed that headline and core inflation rates averaged 1.8 percent and 2 percent, respectively, in the first seven months of the year. Despite high costs and vigorous economic growth, domestic policies and stable demand have limited the impact on consumer prices. The MPC remains vigilant regarding cost pressures and domestic demand, given their influence on the future inflation outlook, especially amid fluctuating developments in the West Asia conflict and global commodity prices.