- Decision
- Maintain
- Rate change
- 0 bps
- overnight policy rate
- 3%
Bank Negara Malaysia’s Monetary Policy Committee kept the Overnight Policy Rate unchanged at 3.0 percent on 6 March 2025, judging the current stance as sufficiently supportive given sustained domestic demand, moderating global inflation and contained price pressures at home. The OPR has been steady at 3.0 percent since at least the January 2025 meeting. The committee noted that January headline and core inflation were 1.7 percent and 1.8 percent respectively and expects 2025 inflation to stay “manageable” amid easing global commodity prices and limited demand-driven pressure, while the economy, which expanded 5.1 percent in 2024, should maintain momentum this year on resilient household spending and ongoing public-private investment projects despite softer export prospects. The ringgit remains influenced mainly by external factors, though narrower rate differentials with advanced economies and structural reforms are seen supporting the currency, even as global policy uncertainty may spur market volatility. The MPC pledged to stay vigilant to domestic and external developments and will keep policy conducive to sustainable growth with price stability.
Rate evolution
Bank Negara Malaysia cut the Overnight Policy Rate by 25 basis points to 2.75% in July 2025 and then held it there through September 2026, pairing a pre-emptive easing with an extended pause. The July cut was framed as a step to preserve steady growth as tariff and geopolitical uncertainties threatened the external outlook, even though the domestic economy was on a strong footing and both headline and core inflation were moderate amid contained cost conditions and no excessive demand pressures. Subsequent decisions judged 2.75% appropriate and supportive as trade uncertainty initially eased somewhat and Malaysia’s economy remained resilient, with domestic demand, investment, employment and wages, alongside electrical and electronics exports and tourism, sustaining growth while inflation stayed moderate and core inflation remained close to its long-term average.
From July to September 2026, the risk narrative turned more cautious as the Middle East conflict raised uncertainty, tightened global financial conditions, lifted energy and commodity prices and caused supply disruptions, but the Monetary Policy Committee continued to hold the Overnight Policy Rate at 2.75%, including on 3 September, as it judged the stance consistent with continued price stability and sustainable growth. Bank Negara Malaysia said the economy expanded by 5.7% in the first half of 2026, driven by stronger-than-expected exports and sustained domestic demand, and expected the momentum to bring full-year growth to around 5%, supported by electrical and electronics and technology-related non-electrical and electronics exports, tourist spending, stable labour market conditions and ongoing investment. Headline and core inflation averaged 1.8% and 2% respectively in the first seven months, with the pass-through of elevated costs contained by domestic policy measures, stable demand conditions and limited wage spillovers, although the Committee remained vigilant to cost pressures and domestic demand conditions amid uncertainty surrounding the Middle East conflict.