Bank Negara Malaysia kept the overnight policy rate at 2.75 percent on Thursday, November 5, concluding its six scheduled reviews of 2026 without a move. The rate has been unchanged since a quarter point cut in July 2025, making this the eighth consecutive meeting on hold. The decision was widely expected: 17 of 23 economists polled by Bloomberg forecast no change, while six had expected a quarter point increase.
The bank said the current stance remains consistent with its outlook for continued price stability and sustainable growth. It raised its assessment of the economy, expecting gross domestic product to grow by more than 5 percent in 2026, supported by strong exports amid the global technology boom, steady domestic demand and tourism, and to remain resilient in 2027. Headline inflation has averaged 1.8 percent so far this year and core inflation 1.9 percent, among the lowest readings in Southeast Asia.
The statement looked past the hold to next year’s risks. The bank expects headline and core inflation to edge higher in 2027, citing geopolitical tensions, elevated commodity prices and adverse weather, while judging that both should remain contained. The Monetary Policy Committee said it will remain vigilant to cost pressures and domestic demand conditions given their impact on the inflation outlook.
That vigilance is where the market debate now sits. Several bank research teams read the statement as slightly more hawkish than September’s and expect a 25 basis point rise to 3.00 percent in the first half of 2027, in some cases as early as the next meeting on January 21, 2027, which would reverse last year’s cut. Others expect an extended hold. Either way, Malaysia enters 2027 as a tightening risk priced as a hold, the opposite configuration to most of the region.