Bank Negara Malaysia Maintains Overnight Policy Rate, Expects Continued Economic Growth

Bank Negara Malaysia's Monetary Policy Committee has decided to keep the overnight policy rate (OPR) at 2.75 per cent. The central bank attributes this decision to continued expansion in global economic growth, supported by sustained consumer spending and front-loading activities. However, trade policy developments and potential tariffs are expected to weigh on global growth. The central bank notes that downside risks remain, but these are limited, and the upside potential includes favourable outcomes from US trade negotiations and pro-growth policies in major economies.

Key Takeaways:

• The Monetary Policy Committee has maintained the overnight policy rate at 2.75 per cent, citing continued global economic growth.
• The expansion in global economic growth is supported by sustained consumer spending and front-loading activities.
• Trade policy developments and potential tariffs are expected to weigh on global growth.
• Downside risks to the growth outlook remain from slower global trade and weaker sentiment.
• Favourable outcomes from US trade negotiations and pro-growth policies in major economies could raise Malaysia's export and growth prospects.
• Headline inflation is expected to remain moderate at 1.4 per cent in 2025, while core inflation is expected to remain stable at 1.9 per cent.
• The central bank expects the overall impact of domestic policy reforms on inflation to be contained.
• The Monetary Policy Committee will continue to monitor ongoing developments and assess the balance of risks surrounding the outlook for domestic growth and inflation.

Statistics:

• Malaysia's economy expanded by 4.4 per cent in the first half of 2025.
• The economy is expected to grow between 4.0 and 4.8 per cent in 2025.
• Headline inflation averaged 1.4 per cent in the first seven months of 2025.
• Core inflation averaged 1.9 per cent in the first seven months of 2025.
• The overnight policy rate remains at 2.75 per cent.

Sources:

• Bank Negara Malaysia (2025)
• The Star (2025)