Bank Negara Malaysia (BNM) left its Overnight Policy Rate (OPR) unchanged at 2.75%, in line with market expectations, as the central bank assessed the current monetary policy stance to be appropriate amid resilient domestic growth and manageable inflation.
In a statement following its Monetary Policy Committee (MPC) meeting, BNM said Malaysia’s economy continued to show resilience in the second quarter, supported by sustained domestic demand and stronger-than-expected export performance.
The central bank maintained its 2026 economic growth forecast of 4% to 5%, underpinned by healthy household spending, continued investment activity, robust electrical and electronics (E&E) exports, a rebound in non-E&E exports and sustained tourism spending.
However, BNM cautioned that the outlook remains subject to downside risks, including a prolonged conflict in the Middle East and lower commodity production, while stronger global growth, firmer demand for E&E products and higher tourism activity could provide upside support.
On prices, headline and core inflation averaged 1.7% and 2.1%, respectively, in the first five months of 2026, broadly in line with expectations despite some initial pass-through from higher global cost pressures.
While elevated global commodity prices stemming from developments in the Middle East are expected to exert upward pressure on inflation, BNM said the impact on both headline and core inflation is likely to remain contained, supported by domestic policy measures and stable demand conditions.
Globally, the central bank noted that growth remained broadly resilient, supported by the continued expansion of the technology sector and improving supply conditions. Nonetheless, uncertainties surrounding the Middle East conflict, tighter global financial conditions and elevated financial market valuations continue to pose risks to the global outlook.
BNM said the current OPR level remains consistent with maintaining price stability while supporting sustainable economic growth, adding that the MPC will continue to monitor developments and assess risks to inflation and growth going forward.
