Malaysia’s central bank decided on Thursday to leave its key interest rate unchanged, a move that had been broadly anticipated by financial markets and analysts.

The decision comes against a backdrop of moderate inflationary pressures and a steady pace of economic expansion.

Bank Negara Malaysia announced that its overnight policy rate (OPR) will remain at 2.75%.

The outcome was in line with expectations, as 29 out of 32 economists surveyed in a Reuters news agency poll had predicted no change in the rate.

At its July policy meeting, Bank Negara Malaysia lowered interest rates for the first time in five years.

Looking ahead to 2026, the central bank expects domestic demand to remain the key engine of growth, supported by stable employment, rising wages, and government measures aimed at boosting household incomes.

The central bank cautioned, however, that the outlook remains uncertain, pointing to potential downside risks stemming from sluggish global trade, softer market sentiment, and commodity output falling short of expectations.

BNM said its monetary policy stance was “appropriate and supportive of the economy amid price stability,” within its statement.

In July, the central bank characterised its rate cut as a precautionary step to safeguard Malaysia’s growth trajectory in the face of moderate inflation.

For this year, the economy is projected to expand between 4% and 4.8%, a downgrade from the earlier forecast of 4.5% to 5.5%, reflecting persistent uncertainties around global trade and tariffs, Reuters reports.

During the second quarter, Malaysia’s economy expanded by 4.4% year-on-year, the same growth rate recorded in the first quarter.

The country continues to contend with a 19% tariff on exports to the United States, though certain products remain exempt while US trade laws undergo review.

Bank Negara Malaysia indicated that inflation is expected to stay moderate this year, with headline inflation averaging 1.4% and core inflation at 1.9% over the first seven months.