KUALA LUMPUR, Jan 27 — Bank Negara Malaysia (BNM) views the country’s 2026 growth outlook as resilient and expects inflation to remain moderate.

In an exclusive interview with Bernama today, the central bank’s governor Datuk Seri Abdul Rasheed Ghaffour explained that the decision to keep the benchmark rate unchanged at 2.75 per cent at the Monetary Policy Committee (MPC) meeting last week reflects BNM’s assessment of the country’s growth and inflation outlook.

“Last year we had good growth. It shows resiliency, and (we expect) this to carry through for 2026,” he said.

“The relatively stable price environment is supported by easing global cost conditions with global commodity prices expecting to remain modest. This has helped contain cost pressures,” Abdul Rasheed said, adding that while global uncertainties persist, the MPC is closely monitoring how these external developments are affecting the outlook of the Malaysian economy.

He stressed that in terms of monetary policy, BNM is not on a predetermined rate path and makes decisions on a meeting-by-meeting basis.

“The assessments on outlook for growth and inflation might change, depending on global and domestic developments. In this environment, the current Overnight Policy Rate (OPR) level of 2.75 per cent is appropriate and supportive of the economy,” he said.

He explained that all relevant data are updated and reviewed by the MPC at each of its six meetings a year.

Abdul Rasheed also explained the role and impact of monetary policy decisions on economic activity.

He elaborated that when the economy is facing a slowdown, reducing the OPR can help spur the economy.

“When there is a rate cut, loan repayment becomes cheaper, leaving households with more money in their pockets to spend. For businesses, it is similar. They can borrow more cheaply, and then (they) can invest,” he said.

In contrast, Abdul Rasheed said that when risks of inflation run high, the central bank takes action to rein in price pressures.

“While higher rates may make loans more expensive, it is necessary to avoid unanchored inflation,” he said

The central bank governor said the MPC seeks to manage inflationary pressures, as keeping inflation in check is important to ensure purchasing power is protected over time. — Bernama