BANK Negara Malaysia (BNM) has maintained the Overnight Policy Rate (OPR) at 2.75 per cent, signalling confidence that the current monetary policy setting remains appropriate to sustain economic growth while ensuring inflation remains under control.
Announcing the decision on Thursday, the Monetary Policy Committee (MPC) said recent economic indicators point to resilient growth in the second quarter of 2026, supported by firm domestic demand and export performance that has exceeded expectations.
The central bank said Malaysia's strong economic fundamentals would continue to cushion the economy against external shocks despite persistent global uncertainty.
Household spending is expected to remain supported by favourable employment conditions, continued wage growth and government policy measures, while investment activity will be driven by the implementation of multi-year public and private sector projects, new public infrastructure initiatives, high realisation of approved investments and ongoing national development master plans.
BNM also expects external demand to strengthen further, supported by improving global prospects, resilient demand for electrical and electronics (E&E) products, a recovery in non-E&E exports and sustained tourism spending.
As a result, the central bank said Malaysia's economy remains on course to expand within its previously projected growth range of 4.0 to 5.0 per cent in 2026.
Globally, BNM said economic growth continues to be supported by the expansion of the technology sector, improving supply chain conditions and more stable commodity prices.
It added that a sustained de-escalation of the conflict in the Middle East would further improve global supply chains, although uncertainties surrounding the conflict, tighter global financial conditions and elevated financial market valuations continue to present downside risks.
The central bank said stronger-than-expected improvements in global supply chains, increased technology spending and pro-growth policy measures in major economies could further support global growth.
On inflation, BNM said headline inflation averaged 1.7 per cent during the first five months of 2026, while core inflation averaged 2.1 per cent, remaining broadly in line with expectations despite some initial pass-through from higher global costs.
Although higher global commodity prices linked to developments in the Middle East are expected to place upward pressure on prices, BNM said the impact on both headline and core inflation is expected to remain contained.
The central bank attributed this to domestic policy measures and stable demand conditions, which are expected to moderate the pass-through of higher external costs into consumer prices.
However, BNM cautioned that Malaysia's economic outlook remains vulnerable to a prolonged conflict in the Middle East and lower commodity production, while stronger global growth following any de-escalation of geopolitical tensions, firmer demand for E&E exports and higher tourism activity could provide additional upside to growth.
"At the current OPR level, the MPC considers the monetary policy stance to be appropriate and consistent with the outlook of continued price stability and sustainable economic growth.
"The MPC will remain vigilant to ongoing developments and assess the balance of risks surrounding the outlook for domestic inflation and growth," the central bank said. - July 9, 2026
