Bank Negara Malaysia (BNM) decided to keep its Overnight Policy Rate (OPR) unchanged at 2.75% for the sixth consecutive meeting, a move that was in line with market expectations according to Commerzbank’s Dr. Henry Hao and Moses Lim [1]. The central bank maintained a cautious stance, citing ongoing global risks. Despite these uncertainties, BNM continues to project economic growth within the 4–5% range for the year, though it noted that weaker commodity production and a prolonged Middle East conflict could push growth towards the lower end of this forecast [1].
Inflation remains contained, with headline and core inflation averaging 1.7% and 2.1% respectively in the first five months of the year, both within BNM's 2026 forecast range of 1.5–2.5% [1]. The USD/MYR exchange rate eased to 4.07 but remains elevated, which Commerzbank attributes to domestic political uncertainty and upcoming state elections [1].
Commerzbank analysts expect BNM to keep the policy rate on hold for the remainder of the year, given the current inflation and growth outlook [1].
CONCLUSION
BNM’s decision to maintain its policy rate reflects a cautious approach amid global and domestic uncertainties. With inflation contained and growth expected within target ranges, analysts anticipate no further rate changes this year, supporting a stable but elevated Ringgit.