Malaysia chose to maintain its key interest rate on Thursday, pointing to strong local economic growth while warning of potential dangers arising from the escalating global trade conflict.
The central Bank Negara Malaysia decided to keep the overnight policy rate at 3% during its second meeting of 2025, aligning with the predictions of all 23 analysts surveyed by Bloomberg News.
The last adjustment to rates by the central bank occurred in May 2023, when there was a 25-basis-point increase.
In a statement released on Thursday, BNM stated that the current monetary policy stance continues to support the economy and is in line with the existing evaluation of inflation and growth prospects.
Malaysia’s consistent economic growth has enabled it to resist the recent global shift towards monetary easing. BNM anticipates that this positive momentum will persist into 2025, driven by domestic demand.
The statement also noted that employment and wage growth are likely to stimulate consumer spending, with investments being propelled by various public and private sector initiatives.
The government has upheld its gross domestic product forecast of a 4.5% to 5.5% expansion for the current year. Despite the optimistic outlook, challenges lie ahead as the global trade conflict intensifies, particularly with US President Donald Trump’s threats of imposing tariffs on semiconductor imports. The United States stands as Malaysia’s third-largest market for chip exports.
