OPR Held at 2.75% Amid Lingering Inflationary Risks

As expected, BNM left the Overnight Policy Rate (OPR) unchanged at 2.75% at its May-26 Monetary Policy Meeting. This decision reflects steady global growth and resilient domestic economic conditions, alongside manageable inflationary pressures. At present, the current rate is deemed “appropriate and consistent” with the economic outlook. 

At the domestic level, BNM highlighted that recent data suggest a continued growth trajectory in 1QCY26, supported by steady domestic demand and strong external trade performance. Looking ahead, domestic conditions are expected to remain resilient on the back of healthy labour market conditions, progress of multi-year projects, the rollout of new smaller-scale public projects, high realisation of approved investment, ongoing execution of national master plans, and stronger external demand for E&E. 

“We reiterate our expectation of an extended OPR pause in 2026, underpinned by resilient economic growth. In 2026, we expect Malaysia’s economy will grow at +4.2%, underpinned by continued expansion in domestic economic activities alongside still-resilient external demand. Nonetheless, the domestic growth trajectory remains susceptible to the longevity and scale of the Middle East conflict and the subsequent impact of higher energy prices on global inflationary pressures and consumer sentiment,” writes MBSB.