Kuala Lumpur: The Malaysian economy is showing resilience in the face of global trade tensions and tariff uncertainties, as Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour confirms the central bank’s decision to maintain the Overnight Policy Rate (OPR) at 3 percent. This decision aligns with BNM’s assessment of the current economic landscape and its commitment to ensuring sustainable growth amid price stability.
According to BERNAMA News Agency, the Governor highlighted the potential impacts of global trade dynamics on Malaysia’s economic outlook, acknowledging both direct and indirect effects from tariffs. Despite these challenges, Malaysia’s GDP growth forecast for 2025 remains at 4.5-5.5 percent, with no expectation of a recession. The economy’s resilience is bolstered by strong domestic demand, particularly in household spending and investment activity.
Malaysia’s economy continued to grow in the first quarter of 2025, reflecting the strength of domestic demand. Employment, wage growth, and income-related policies are expected to support household spending, while investment activity is sustained by the realization of approved projects. This positions Malaysia to withstand potential global economic shocks.
Trade tensions and global policy uncertainties are anticipated to impact Malaysia’s external sector. However, the demand for electrical and electronic products, higher tourist spending, and a diversified export structure provide cushioning against these challenges. No single market accounts for more than 15 percent of Malaysia’s exports, reducing reliance on any one product or market.
Risks to growth include potential slowdowns among major trading partners and lower-than-expected commodity production. Conversely, positive trade negotiations, pro-growth policies, and robust tourism could enhance growth prospects. Inflation remained moderate in the first quarter, with tariffs unlikely to significantly affect the domestic inflation outlook.
Governor Abdul Rasheed emphasized BNM’s readiness to respond to evolving economic conditions. While Malaysia’s economy remains stable, BNM continues to monitor global developments closely. The central bank’s market operations aim to ensure the orderly functioning of the foreign exchange market and maintain liquidity in the financial system.
The easing of the Statutory Reserve Requirement (SRR) is part of BNM’s strategy to manage liquidity amid financial market volatility. The SRR is a tool for liquidity management, distinct from the OPR, which signals the monetary policy stance. The decision to ease the SRR aims to enhance banks’ liquidity management and support financial intermediation activities.
BNM’s close coordination with the government on fiscal measures ensures alignment towards common goals. The central bank remains committed to transparent communication with the public and businesses, providing information necessary for strategic planning in uncertain times.