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

Strategic Insights -

Malaysia's central bank, Bank Negara Malaysia, has decided to keep the overnight policy rate (OPR) unchanged at 2.75 per cent, citing continued expansion in global economic growth. The latest indicators suggest sustained consumer spending and front-loading activities, with the global growth outlook supported by positive labour market conditions, less restrictive monetary policy, and fiscal stimulus. However, the bank noted that downside risks remain, particularly from potentially higher tariffs and escalations in geopolitical tensions. Malaysia's economy is expected to grow between 4.0 and 4.8 per cent in 2025, with growth in 2026 supported by resilient domestic demand and investment activities.

Key Takeaways:

  • The Bank Negara Malaysia's Monetary Policy Committee (MPC) has maintained the overnight policy rate (OPR) at 2.75 per cent.
  • The central bank expects continued global economic growth, supported by sustained consumer spending, front-loading activities, and positive labour market conditions.
  • Downside risks to the growth outlook remain from potentially higher tariffs, escalations in geopolitical tensions, and slower global trade.
  • Malaysia's economy expanded by 4.4 per cent in the first half of 2025 and is expected to grow between 4.0 and 4.8 per cent in 2025.
  • The expansion in investment activity will be driven by multi-year projects, high realisation of approved investments, and the implementation of catalytic initiatives under the national master plans and the 13th Malaysia Plan (13MP).
  • Headline and core inflation averaged 1.4 per cent and 1.9 per cent in the first seven months of the year, respectively.
  • The central bank expects headline inflation to remain moderate amid contained global cost conditions and core inflation to remain stable and close to the long-term average.
  • The monetary policy stance is considered appropriate and supportive of the economy amid price stability.

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 the year.
  • Core inflation averaged 1.9 per cent in the first seven months of the year.
  • The monetary policy committee (MPC) has maintained the overnight policy rate (OPR) at 2.75 per cent for the 25th consecutive time.

Sources:

  • BERNAMA News Agency (BERNAMA, 2025, September 4)
  • Bank Negara Malaysia (2025)