- Decision
- Maintain
- Rate change
- 0 bps
- overnight policy rate
- 2.75%
The Monetary Policy Committee of Bank Negara Malaysia held the Overnight Policy Rate (OPR) at 2.75%, judging the stance consistent with continued price stability and sustainable economic growth. The OPR has remained at 2.75% since September 2025. Malaysia’s economy expanded 5.7% in the first half of 2026, driven by stronger-than-expected exports and sustained domestic demand, and growth is expected at around 5% for the full year. Headline and core inflation averaged 1.8% and 2.0%, respectively, in the first seven months, as domestic policy measures and stable demand contained the pass-through from elevated costs. Global growth remained resilient on strong technology expansion, improving supply conditions and stable labour markets, although the Middle East conflict, inflationary pressures and tighter financial conditions pose downside risks. The committee will remain vigilant to cost and domestic demand pressures and assess risks to the inflation and growth outlook.
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.