Soft inflation prompts Malaysian CB to keep rate steady at 2.75%

Malaysia's central bank held its benchmark interest rate steady on Thursday and most analysts expect it to stay that way for the rest of the year.

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Soft inflation and relatively resilient economic growth prompted Bank Negara Malaysia (BNM) to keep its overnight policy rate at 2.75%, as expected, after cutting it for the first time in five years at its previous policy review in July.

The central bank said in a statement that heading into 2026, economic growth will continue to be driven by domestic demand, while employment, wage growth and income-related policy measures will remain supportive of household spending.

The outlook was subject to uncertainties, it said, flagging downside risks from slower global trade, weaker sentiment, and lower-than-expected commodity production.

In a recent Reuters poll, most of the 28 economists surveyed said they expect BNM to hold rates until the end of the year. Six, however, forecast a 25-basis-point cut to 2.50 per cent while one saw a deeper 50-basis-point cut to 2.25 per cent.