Bank Negara Holds Strong at 3% Interest Rate

Bank Negara Malaysia (BNM) has decided to maintain its Overnight Policy Rate (OPR) at 3%, with the Monetary Policy Committee (MPC) affirming that the current stance supports stable, sustainable growth. BNM emphasized it will monitor inflation and growth trends closely to adapt policies for 2025.

Bank Negara Supports Growth

The central bank highlighted Malaysia’s strong economic activity, supported by resilient domestic spending, increased exports, and a robust investment environment driven by ongoing public and private projects. Export growth is particularly bolstered by the global technology upcycle, demand for non-electrical and electronic goods, and rising tourist expenditures. Additional investments will further expand Malaysia’s productive capacity and benefit from Budget 2025 initiatives.

BNM noted that inflation remains manageable, averaging 1.8% year-to-date, with projections for 2025 indicating moderate levels due to easing global costs and stable domestic demand. However, inflationary pressures may arise depending on domestic policy impacts, global commodity prices, and financial market changes.

The central bank also addressed the ringgit’s performance, attributing its fluctuations primarily to external factors, such as U.S. election outcomes. BNM anticipates that narrowing interest rate gaps with advanced economies, alongside Malaysia’s economic growth prospects and structural reforms, will support the currency.

Globally, BNM observed resilient labor markets and an ongoing trade recovery, especially in E&E products, which support sustained growth. However, downside risks remain due to potential geopolitical conflicts, financial market volatility, and slower momentum in major economies.

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