Kuala Lumpur, March 5, 2026 — The Monetary Policy Committee (MPC) of Bank Negara Malaysia has decided to maintain the Overnight Policy Rate (OPR) at 2.75%, citing steady domestic economic growth and moderate inflation despite rising global uncertainties.
The decision, announced after the committee’s latest policy meeting, reflects the central bank’s view that the current monetary policy stance remains supportive of economic growth while preserving price stability.
Strong Domestic Momentum
Malaysia’s economy expanded 5.2% in 2025, driven largely by resilient domestic demand, strong electrical and electronics (E&E) exports, and a rebound in inbound tourism. The central bank expects this growth momentum to continue into 2026, supported by several key factors:
- Stable employment and continued wage growth
- Policy measures supporting household spending
- Ongoing private and public investment projects
- Strong realisation of approved investments
- Implementation of national development master plans
The external sector is also expected to benefit from continued demand for E&E exports and increased tourist spending.
Inflation Remains Moderate
Inflation remains well contained. In January 2026, Malaysia’s headline inflation stood at 1.6%, while core inflation was recorded at 2.3%.
The central bank expects overall inflation in 2026 to remain moderate, even as global commodity prices may face volatility due to geopolitical developments. Core inflation is forecast to stay close to its long-term average, reflecting steady economic expansion without excessive demand pressures.
Rising Global Risks
Despite a stable domestic outlook, the MPC highlighted growing global uncertainties, particularly stemming from the ongoing conflict in the Middle East. The central bank noted that the impact on the global economy will depend on the duration and severity of the conflict.
Other downside risks include:
- Potential escalation in geopolitical tensions
- Heightened volatility in global financial markets
- Concerns over higher tariffs
- Elevated valuations in global financial assets
- Slower global trade and weaker commodity production
However, the MPC also sees potential upside factors, including stronger technology investment globally, milder tariff impacts, and pro-growth policy measures in major economies.
Policy Outlook
The MPC stated that Malaysia remains well positioned to face external challenges, supported by strong domestic growth, moderate inflation, a sound financial sector and a resilient external position.
The committee reiterated that it will continue to monitor global and domestic developments closely, particularly the evolving geopolitical situation, and will adjust policy if necessary to ensure sustainable growth and price stability.
