Bank Negara Malaysia (BNM) has maintained the Overnight Policy Rate (OPR) at 3% following a meeting of its Monetary Policy Committee (MPC) today. The central bank stated that the current policy stance is aligned with prevailing assessments of inflationary pressures and economic growth prospects.

BNM highlighted that global economic activity continues to expand, supported by steady domestic demand, labour market resilience, and front-loading activities. While monetary and fiscal policy support remain in play internationally, downside risks have emerged. Recently announced tariff measures by the United States and retaliatory responses have clouded the global trade outlook, creating uncertainties that could intensify volatility across financial markets worldwide.

In Malaysia, economic momentum was sustained in the first quarter, bolstered by resilient domestic demand and export growth. However, BNM cautioned that rising global trade tensions and policy unpredictability are likely to dampen the external sector’s contribution to growth in the near term. Nonetheless, continued demand for electrical and electronic products, alongside increased tourist spending, is expected to offer some buffer.

Domestic growth is projected to remain robust, anchored by employment and wage gains in locally oriented sectors, as well as targeted income-support measures. Investment activity is forecast to remain strong, supported by progress on multi-year private and public sector projects, and the ongoing implementation of catalytic programmes under national master plans. 

Still, BNM acknowledged that the balance of risks to the growth outlook leans to the downside, citing potential slowdowns among major trading partners, softening consumer and investor sentiment, and weaker-than-expected commodity output. On the upside, better trade negotiations, pro-growth policies abroad, and a resurgence in tourism could lift economic prospects.

Meanwhile, headline inflation averaged 1.5% in the first quarter of 2025, while core inflation stood at 1.9%. BNM expects inflation to remain manageable throughout the year, helped by subdued global cost pressures and the absence of domestic demand surges. Global commodity prices are projected to decline further, which would moderate input costs. 

The central bank also noted that the inflationary impact of domestic policy reforms is anticipated to be contained, though external price developments and the implementation of domestic measures could influence inflationary trends.

Looking ahead, the MPC reiterated its commitment to ensuring that the monetary policy stance continues to support sustainable economic growth while maintaining price stability. The committee also pledged to remain vigilant in monitoring ongoing developments to guide future policy decisions.

• TAGS:
• Bank Negara Malaysia
• BNM
• Monetary Policy Committee
• MPC
• OPR
• Overnight Rate Policy