KUALA LUMPUR, 5 November 2025 — Bank Negara Malaysia (BNM) has decided to maintain the Overnight Policy Rate (OPR) at 2.75%, in line with expectations from all 22 economists surveyed by Bloomberg. The central bank said the current rate remains “appropriate and supportive” of economic growth amid a backdrop of stable prices and resilient domestic demand.
In a statement, the Monetary Policy Committee (MPC) noted that it will continue to monitor developments and assess the balance of risks surrounding Malaysia’s growth and inflation outlook.
“At the current OPR level, the monetary policy stance is appropriate and supportive of the economy amid stable prices,” BNM said.
“The MPC will continue to monitor ongoing developments and assess the balance of risks surrounding the outlook for domestic growth and inflation.”
Global Outlook: Resilient Growth but Rising Risks
BNM highlighted that global growth continues to expand, supported by resilient labour markets, moderating inflation, and the gradual easing of monetary and fiscal policies across major economies.
While higher tariffs are expected to weigh on global activity, the central bank said the conclusion of several trade negotiations has helped reduce uncertainty.
However, downside risks remain, including:
- Potentially higher, product-specific tariffs,
- Heightened geopolitical tensions, and
- Concerns over elevated financial market valuations.
Upside potential could emerge from milder tariff impacts and pro-growth policy moves in advanced economies, BNM added.
Malaysia’s Growth Momentum Holds Steady
Domestically, the central bank noted better-than-expected third-quarter growth, driven by sustained domestic demand, resilient electrical and electronics (E&E) exports, and a recovery in commodity production.
Looking ahead, domestic demand is expected to remain a key growth driver heading into 2026, underpinned by steady employment, wage growth, and income-related policy support.
“The expansion in investment activity will be driven by the progress of multi-year projects in both the private and public sectors, the continued high realisation of approved investments, as well as the ongoing implementation of catalytic initiatives under national master plans and the Thirteenth Malaysia Plan (RMK13),” BNM said.
The central bank added that measures under Budget 2026 will further support domestic momentum.
However, BNM cautioned that the growth outlook remains susceptible to external risks, including slower global trade, weaker sentiment, and lower-than-expected commodity output. Upside potential could arise from stronger global recovery, higher E&E demand, and robust tourism activity.
Inflation Outlook: Stable and Contained
Year-to-date, headline inflation averaged 1.4%, while core inflation stood at 1.9%, indicating a continued moderation trend.
BNM expects headline inflation to remain moderate in 2026, supported by easing global cost pressures and stable commodity prices, which should help keep domestic cost conditions contained.
“Core inflation in 2026 is expected to remain stable and close to its long-term average, reflecting continued economic expansion and the absence of excessive demand pressures,” the central bank said.
“The overall impact of domestic policy reforms on inflation in 2026 is expected to be limited.”
