Malaysia’s economic policy landscape has stayed broadly stable over the past month - but not without pressure points. Bank Negara Malaysia (BNM) is holding its line on rates, the Ringgit remains fragile, and there are signs of tightening behind the scenes. At the same time, labour market resilience and the digital banking rollout continue to offer a steadier narrative. Even so, external risks are growing and BNM is subtly shifting focus to structural reforms to build longer-term buffers.
Monetary Policy.
We saw no surprises here. BNM kept the Overnight Policy Rate unchanged at 3.00%. It has sat there since May 2023. Policymakers remain confident that inflation is contained - forecast between 2.0% and 3.5% this year - and see no need to move aggressively, especially with domestic demand holding up. Growth printed at 5.1% in 2024, but that trajectory now faces headwinds, not least the risk of US tariffs on Malaysian goods. For now though, the central bank’s tone remains balanced: cautiou...
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