- Decision
- Maintain
- Rate change
- 0 bps
- overnight policy rate
- 2.75%
The Monetary Policy Committee of Bank Negara Malaysia maintained the Overnight Policy Rate at 2.75% on 9 July 2026, saying the current stance is appropriate and consistent with continued price stability and sustainable economic growth as Malaysia’s economy shows resilient second-quarter momentum while inflation remains broadly within expectations. For Malaysia, the central bank said growth was being driven by sustained domestic demand and stronger-than-expected exports, with employment, wage growth and policy measures supporting household spending, and it expects 2026 growth to be firmly within the 4%-5% forecast range, helped by multi-year investment projects, high realisation of approved investments, robust electrical and electronics demand, a rebound in non-E&E exports and sustained tourist spending. Headline and core inflation averaged 1.7% and 2.1% in the first five months of the year, and while elevated global commodity prices linked to developments surrounding the Middle East conflict are expected to put upward pressure on prices, the impact on 2026 inflation is expected to remain contained by domestic policy measures and stable demand conditions. Globally, Bank Negara Malaysia said growth remains broadly resilient, supported by strong tech expansion and improving supply conditions and key commodity prices, though risks remain from the Middle East conflict, tighter global financial conditions and valuation concerns in financial markets. The central bank said it will remain vigilant and assess the balance of risks surrounding the outlook for domestic inflation and growth.
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.