Malaysia’s central bank holds key rate at 2.75% 

[KUALA LUMPUR] Malaysia’s central bank held its benchmark interest rate steady at a review on Thursday (Sep 4), as widely expected by economists, amid soft inflation and resilient economic growth.

Bank Negara Malaysia (BNM) kept its overnight policy rate (OPR) at 2.75 per cent, as had been expected by 29 of 32 economists surveyed in a Reuters poll.

At its previous policy review in July, BNM had cut rates for the first time in five years.

BNM said that heading into 2026, growth will continue to be driven by domestic demand, while employment, wage growth and income-related policy measures will remain supportive of household spending.

The outlook was subject to uncertainties, it said, flagging downside risks from slower global trade, weaker sentiment, and lower-than-expected commodity production.

In a statement, BNM said its monetary policy stance was “appropriate and supportive of the economy amid price stability”.

The central bank had described its July rate cut as a pre-emptive measure to preserve Malaysia’s economic growth path amid moderate inflation. The economy is expected to grow between 4 per cent and 4.8 per cent this year, lower than an initial forecast range of 4.5 per cent to 5.5 per cent due to ongoing trade and tariff uncertainties.

In the second quarter, the economy grew 4.4 per cent from a year earlier, matching the pace in the first three months of the year. Malaysia faces a 19 per cent tariff on its exports to the United States, although some goods remain exempt pending a review of US laws.

Inflation was expected to remain moderate this year, with headline and core inflation averaging 1.4 per cent and 1.9 per cent respectively in the first seven months, BNM said. REUTERS