Kuala lumpur: Bank Negara Malaysia (BNM) is set to maintain the overnight policy rate (OPR) at 2.75 percent throughout 2026, attributed to subdued inflation in 2025 and consistent economic growth.

According to BERNAMA News Agency, the latest consumer price index (CPI) data released by the Department of Statistics Malaysia (DoSM) indicates that full-year inflation for 2025 settled at 1.4 percent, a decrease from 1.8 percent in 2024, which suggests the continuation of the post-pandemic disinflationary trend.

As 2026 approaches, Hong Leong Investment Bank Bhd (HLIB) anticipates the CPI, a primary measure of inflation in Malaysia, will slightly increase to 1.7 percent. This rise is expected to be influenced by the low base effect, domestic policy changes, and inflation related to communication.

Nevertheless, HLIB predicts the upward trend will be modest due to factors such as decreased RON95 prices, a stable global commodity environment, and a robust ringgit.

DoSM data reveals that headline inflation rose by 1.6 percent year-on-year (y-o-y) in December 2025, up from 1.4 percent in November 2025, surpassing the median consensus estimate of 1.4 percent. The increase in inflation was driven by higher costs in categories such as alcoholic beverages and tobacco, housing, utilities and other fuels, information and communication, as well as personal care.

Additionally, core inflation saw a slight increase to 2.3 percent y-o-y in December 2025, compared to 2.2 percent in the previous month.