Malaysia Central Bank Holds Rates as Growth Stays Firm

By Ying Xian Wong

KUALA LUMPUR--Malaysia's central bank kept its benchmark interest rate unchanged, as expected, as strong economic growth and mild inflation gave policymakers room to remain on hold.

Bank Negara Malaysia on Thursday held its overnight policy rate at 2.75%, where it has stood since a 25-basis-point cut in July 2025.

The decision matched the forecasts of all seven economists polled by The Wall Street Journal.

"The latest indicators point to resilient global growth, supported by strong global tech expansion, improving supply conditions and stable labor markets," Bank Negara said in a statement.

Malaysia's economy expanded 6.0% from a year earlier in the second quarter, accelerating from 5.4% in the first quarter.

Growth was supported by robust exports and continued domestic demand, with strength in electrical and electronics products, services and liquefied-natural-gas exports.

The decision aligns with Kenanga Investment Bank's forecast that the policy rate will remain at 2.75% through 2026, given contained underlying inflation and resilient domestic demand.

Inflation risks remain largely supply-driven, allowing Bank Negara to look past temporary energy-price swings unless they generate broader and more persistent pressures, Kenanga economists said.

Federal Reserve Chair Kevin Warsh's hawkish remarks at Jackson Hole didn't change Kenanga's outlook. The economists said the relatively narrow breadth of U.S. price pressures supports their view that global inflation remains largely supply-driven.

Write to Ying Xian Wong at yingxian.wong@wsj.com

(END) Dow Jones Newswires

September 03, 2026 03:17 ET (07:17 GMT)