Malaysia's Central Bank Holds Rate Steady, Cites Resilient Growth

By Ying Xian Wong

KUALA LUMPUR--Malaysia's central bank kept its benchmark interest rate unchanged as expected, pointing to resilient growth and contained inflation.

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 four out of seven economists polled by The Wall Street Journal.

"At the current OPR level, the MPC considers the monetary policy stance to be consistent with the outlook of continued price stability and sustainable economic growth," Bank Negara said in a statement.

With rates on hold, attention now shifts to the central bank's policy outlook and when it may begin raising borrowing costs as growth remains strong.

BofA Securities expects Bank Negara to keep rates unchanged for an extended period, although it sees the possibility of a 25-basis-point increase in March 2027.

The bank sees limited near-term inflationary pressures and no immediate financial-stability concerns. However, a rate increase could be warranted if higher production costs push up consumer prices or stronger economic growth adds to inflationary pressures.

By March 2027, Bank Negara should have greater clarity on the impact of geopolitical tensions, the sustainability of the artificial-intelligence investment boom and its effects on domestic demand, BofA economists Kai Wei Ang and Rahul Bajoria said in a recent note.

The central bank should also have a clearer picture of wage increases and seasonal price pressures, which could influence the timing of its next policy move, they added.

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

(END) Dow Jones Newswires

November 05, 2026 02:16 ET (07:16 GMT)