KUALA LUMPUR, Nov 5 — Bank Negara Malaysia (BNM) has decided to maintain the Overnight Policy Rate (OPR) at 2.75 per cent following its final Monetary Policy Committee (MPC) meeting of the year today.

In a statement, the central bank said the latest indicators pointed to continued resilience in global growth, supported by strong global technology investment and stable labour markets.

“At the current OPR level, the MPC considers the monetary policy stance to be consistent with the outlook of continued price stability and sustainable economic growth,” it said.

BNM said the MPC would remain vigilant to evolving conditions and assess their implications for the balance of risks surrounding the outlook for domestic inflation and economic growth.

Year-to-date, headline and core inflation averaged 1.8 per cent and 1.9 per cent, respectively, the central bank said.

Looking ahead to 2027, geopolitical developments, elevated global commodity prices and adverse weather conditions are expected to exert upward pressure on inflation.

Both headline and core inflation are therefore expected to edge higher, although they are likely to remain contained amid continued domestic policy measures and stable demand conditions.

“The MPC will remain vigilant to cost pressures and domestic demand conditions given their impact on the inflation outlook,” BNM said.

Inflation has edged higher following an increase in energy costs and is expected to remain elevated as higher costs continue to be passed through to consumer prices.

On the global outlook, BNM said uncertainties surrounding geopolitical developments would continue to weigh on growth and fuel inflationary pressures. However, the impact is expected to be cushioned by sustained technology-related spending and continued adaptation to supply constraints.

Downside risks to global growth include prolonged geopolitical tensions, tighter global financial conditions arising from monetary policy adjustments, concerns over financial market valuations and fiscal vulnerabilities.

“Upside potential could come from stronger technology spending and a faster-than-expected recovery in supply chain conditions,” the central bank said.

On the domestic front, recent indicators point to continued strength in economic growth in the third quarter of 2026, underpinned by robust exports and sustained domestic demand.

The solid momentum is expected to lift full-year growth in 2026 to above five per cent.

“Looking ahead, the economy’s sound fundamentals are expected to keep growth resilient in 2027.

“The external sector is expected to remain a major driver of growth, supported by the ongoing global technology upcycle and firm tourist spending,” BNM said.

Stable labour market conditions and continued investment activity are also expected to support domestic demand, while measures under Budget 2027 will provide further impetus to private consumption.

However, the growth outlook remains subject to downside risks, including a prolonged conflict in the Middle East and lower commodity production.

On the upside, stronger-than-expected global growth, firmer technology-related export demand and higher tourism activity could provide additional support to economic expansion, BNM added. — Bernama