Kuala lumpur: Bank Negara Malaysia’s (BNM) decision to maintain the overnight policy rate (OPR) at 2.75 percent indicates a strategic move to support economic growth while preventing financial imbalances, according to an economist.
According to BERNAMA News Agency, the unchanged OPR follows a pre-emptive 25-basis-point cut in July, which aimed to uphold Malaysia’s growth trajectory amidst moderate inflation prospects. Economist Doris Liew, who specializes in Southeast Asian development, stated that this decision underscores BNM’s commitment to monetary stability.
“The current OPR continues to strike a balance between supporting domestic growth and maintaining stability in lending, deposits, and overall borrowing costs,” Liew explained to Bernama. The central bank had previously adjusted the ceiling and floor rates of the OPR corridor to three percent and 2.5 percent, respectively, on July 9.
The last adjustment to the OPR was in March 2023 when it was set at 2.75 percent before being raised to three percent in May 2023. Liew noted that the July rate cut was primarily intended to cushion the economy against global trade uncertainties and potential impacts from tariff disputes affecting Malaysia’s export-oriented sectors.
“BNM appears intent on anchoring interest rates and inflation expectations while ensuring sufficient support for economic momentum heading into the second half of the year,” she added. Liew also suggested that unless there is a significant downturn in external demand or a sharper-than-expected slowdown in domestic activity, the central bank is likely to maintain its current stance for the remainder of the year.
Mohd Sedek Jantan, director at IPP Wealth Managers and an investment strategist, echoed these sentiments, stating that the OPR reflects a supportive stance amid a resilient domestic economy projected to grow between four and 4.8 percent in 2025. He attributed this growth to strong domestic demand and moderate inflation.
Jantan highlighted that sustained household spending and investment are expected to continue driving expansion without overheating, with ongoing support from the technology and tourism sectors bolstering exports. He noted that while trade policy developments could still influence global growth prospects, uncertainties have eased, and contained global costs combined with the absence of excessive domestic demand are expected to limit price pressures.
“By holding steady, BNM preserves policy space to cushion against potential volatility in global demand while ensuring the OPR remains conducive to growth amid price stability, with the bank continuing to monitor global impacts on Malaysia’s economy,” Jantan concluded.