Bank Negara Malaysia Holds Overnight Policy Rate Steady at 2.75%

KUALA LUMPUR – Bank Negara Malaysia (BNM) has decided to maintain the overnight policy rate (OPR) at 2.75% for the eighth consecutive meeting, aligning with market expectations. This decision, announced on September 3, reflects the central bank's confidence in the resilience of Malaysia's economy despite ongoing global uncertainties, including geopolitical tensions and inflationary pressures.

According to BNM, the current OPR level is deemed appropriate for sustaining price stability and supporting economic growth. The central bank has kept the rate unchanged since a reduction of 25 basis points in July 2025. A Bloomberg survey indicated that 20 out of 22 economists anticipated this decision, with only two predicting a potential hike.

“The current OPR level is deemed appropriate for sustaining price stability and supporting economic growth.”Bank Negara Malaysia, statement

In its statement, BNM highlighted that global economic indicators remain positive, supported by strong growth in the technology sector and improving supply conditions. Despite global inflation easing recently, it is expected to remain elevated due to lingering effects from higher energy costs. BNM noted that the outlook for global growth remains cautious, influenced by ongoing geopolitical tensions and tighter financial conditions.

The Malaysian economy has shown robust performance, driven by strong export performance and sustained domestic demand. The government projects a growth rate of around 5% for the full year, bolstered by demand for electrical and electronics goods and continued tourist spending.

Economists from various institutions, including OCBC Bank and BIMB Securities, predict that BNM may begin a gradual normalization of monetary policy in 2027, with potential hikes in response to improved economic conditions. OCBC expects the OPR to rise to 3% in early 2027, while BIMB anticipates a similar trajectory based on sustained economic growth and manageable inflation.

“The decision should be viewed in the context of the overall economic situation, which is showing solid growth.”Akmal Nasrullah Mohd Nasir, Economy Minister

Economy Minister Akmal Nasrullah Mohd Nasir emphasized that the decision to maintain the OPR should be viewed in the context of the overall economic landscape, which has shown strong growth. He noted that inflation rates have remained stable, averaging around 1.8% in July, contributing to a sense of monetary stability. He added that the government will continue to focus on the cost of living in the upcoming Budget 2027, scheduled for presentation in October.

As Malaysia navigates these economic challenges, the central bank remains vigilant, ready to adjust its policies to ensure continued growth and stability in the face of evolving global dynamics.