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BANK Negara Malaysia has kept the Overnight Policy Rate unchanged at 2.75 per cent, signalling a continued accommodative monetary stance aimed at supporting economic growth amid a stable inflation environment.
In a statement following its Monetary Policy Committee meeting, the central bank said the current level of the OPR, unchanged since July 2025, remains appropriate to preserve macroeconomic stability while sustaining domestic growth momentum.
According to Bank Negara, Malaysia’s economic growth in 2025 is expected to come in around the upper end of its forecast range, with the momentum projected to carry through into 2026. The outlook, it said, is underpinned by resilient domestic demand, including steady employment conditions, wage growth and income-related policy measures that continue to support household spending.
“Investment activity will be driven by progress in multi-year projects undertaken by the private and public sectors, the implementation of new smaller-scale public projects, higher ongoing realisation of approved investments, as well as the continued rollout of national master plans,” the central bank said.
It added that the external sector is expected to benefit from sustained strength in electrical and electronics exports and higher tourist spending.
However, Bank Negara cautioned that the growth outlook remains subject to uncertainty, particularly from global developments. “Risks to the growth outlook remain tilted to the downside, stemming mainly from slower global trade and lower-than-expected commodity production,” it said.
At the same time, the central bank noted that upside risks could emerge from stronger global growth prospects, firmer demand for E&E products and more robust tourism activity.
On prices, Bank Negara said headline inflation and core inflation are projected to average 1.4 per cent and 2.0 per cent respectively in 2025.
“For 2026, headline inflation is expected to remain moderate amid continued easing in global cost conditions. Global commodity prices are expected to remain moderate, contributing to contained domestic cost conditions,” it said.
Core inflation in 2026 is also expected to remain stable and close to its long-term average, reflecting ongoing economic expansion without excessive demand pressures.
Globally, Bank Negara observed that growth in 2025 has exceeded expectations, largely reflecting lower-than-anticipated tariffs, higher technology-related spending driven by artificial intelligence and stronger fiscal support.
Looking ahead to 2026, it said that while tariff-related effects could weigh on global growth, the overall outlook remains resilient, supported by sustained domestic demand, easing inflation, robust technology investment and continued fiscal and monetary policy support.
“Downside risks to growth persist due to the possibility of higher tariffs, escalating geopolitical tensions and heightened volatility in global financial markets. In addition, concerns remain over elevated valuations in financial markets,” the central bank said.
At the same time, it noted that growth could surprise on the upside if technology spending strengthens further, tariff impacts on economic activity are more moderate and growth-supportive policies are implemented in advanced economies.
At the current OPR level, the MPC said the monetary policy stance remains appropriate and continues to support the economy in an environment of price stability. The committee added that it will remain vigilant, closely monitoring incoming data and assessing the balance of risks to domestic growth and inflation prospects. - January 22, 2026
