Bank Negara Malaysia Steadies the Ship: Rates Unchanged amid Economic Growth

Bank Negara Malaysia (BNM) will maintain its policy rate at 3.00% throughout the year due to strong economic growth and controlled inflation, according to a Reuters poll. Despite regional easing trends, BNM plans a cautious approach concerning currency stability amidst external economic uncertainties.

Bank Negara Malaysia (BNM) is set to hold its key policy rate steady at 3.00% for the tenth consecutive meeting, as indicated by a recent Reuters poll. This decision comes as the country's economic growth remains robust, with inflation effectively managed, providing no immediate need for rate adjustments.

Malaysia's economy grew by 5.1% last year, with inflation subdued at 1.8% in November. Analysts suggest that BNM's reluctance to alter rates stems from a desire to prevent further devaluation of the ringgit, which has fallen by about 2.3% since the 2016 U.S. presidential election.

Economists predict that the BNM will continue to prioritize currency stability over rate cuts, unlike other regional central banks. The cautious outlook aligns with expectations of moderate economic growth and inflation rates through 2026.

(With inputs from agencies.)