Bank Negara Malaysia keeps overnight policy rate unchanged

KUALA LUMPUR (Sept 3): Malaysia’s central bank kept interest rates unchanged on Thursday as expected amid stable prices and strong growth.

The overnight policy rate is maintained at 2.75% following the fifth of six scheduled reviews for the year, Bank Negara Malaysia (BNM) said in a statement on Thursday. The move was correctly predicted by 20 of 22 economists polled by Bloomberg, while two predicted an increase of 25 basis points.

The current monetary policy stance is considered to be “consistent with the outlook of continued price stability and sustainable economic growth”, BNM said.

The central bank has stood pat at every scheduled review since cutting the policy rate by 25 basis points in July last year as the economy emerged relatively unscathed from US tariffs and thrived in recent quarters even as the Iran War raged on.

Malaysia’s growth accelerated to 6.0% year-on-year in the second quarter from the 5.4% pace in the first three months of 2026 thanks to resilient household spending and strong exports.

“The solid growth momentum” is expected to bring 2026 growth to around 5%, and the economy’s “sound fundamentals are expected to keep growth resilient in 2027”, BNM said in the post-meeting statement.

External sector will be lifted by improved global prospects and robust demand for electrical and electronics goods, as well as continued strength in tech-related exports and sustained tourist spending, the central bank noted.

BNM, however, has begun flagging elevated costs and strong economic growth on inflation. 

“The pass-through to consumer prices has been contained by domestic policy measures and stable demand conditions amid limited spillover of external sector strength to wages”, but pressures are building up, the central bank noted.

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