Bank Negara Malaysia has kept the overnight policy rate (OPR) unchanged at 2.75% at the last Monetary Policy Committee meeting of the year, saying the current level is consistent with its outlook for price stability and sustainable growth.
The decision came as some economists had expected a rate increase. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid had forecast a 25-basis-point hike, and expectations of higher rates had helped the ringgit open stronger against the US dollar this morning at 4.0585/4.0660.
The central bank said recent indicators pointed to continued strength in the third quarter, supported by strong exports and sustained domestic demand, and it expects the economy to grow by more than 5% this year. It said sound fundamentals would keep growth resilient in 2027, with the external sector a key driver and measures in Budget 2027 expected to support private consumption.
Headline inflation has averaged 1.8% and core inflation 1.9% so far this year. Bank Negara said geopolitical developments, elevated global commodity prices and adverse weather are expected to push both measures higher in 2027, although inflation should remain contained.
It cited a prolonged conflict in the Middle East and lower commodity production as risks to growth, and said it would stay vigilant to cost pressures and domestic demand given their effect on the inflation outlook.