The central bank said that at the current OPR level, its monetary policy stance remained consistent with its current assessment of inflation and growth prospects, despite the US’s imposition of “reciprocal” tariffs.
“Recognising that there are downside risks in the economic environment, the MPC remains vigilant to ongoing developments to inform the assessment on the domestic inflation and growth outlook.
“The MPC will ensure the monetary policy stance remains conducive to sustainable economic growth amid price stability,” it said in a statement.
BNM said domestic demand and front-loading activities were expected to continue to support global growth and trade, with the global growth outlook backed by positive job market conditions, relaxed monetary policies and fiscal stimulus.
However, the central bank said the US tariffs have weakened global growth and trade outlook, which remained subject to the outcome of trade talks and geopolitical tensions.
It said this could lead to greater volatility in the global financial markets.
While Malaysia’s economy expanded in the first quarter of 2025, thanks to domestic demand and export growth, BNM said rising trade tensions and global policy uncertainties will weigh in on the external sector.
“The continued demand for electrical and electronic goods and higher tourist spending, however, will provide some cushion to exports. Overall, growth is expected to be anchored by resilient domestic demand.
“Employment and wage growth, particularly within domestic-oriented sectors, as well as income-related policy measures, will support household spending.”
The central bank added that favourable outcomes from global trade talks, the adoption of pro-growth policies in major economies and increased tourism activity could improve Malaysia’s growth prospects.
It said headline and core inflation averaged at 1.5% and 1.9% respectively in the first quarter of the year while inflation was expected to remain manageable this year.
“Risks to inflation would be dependent on the extent of spillover effects of domestic policy measures, as well as external developments surrounding global commodity prices, financial markets and trade policies.”