Bank Negara holds OPR at 2.75% in final 2026 meeting, sees no need to tighten
By Neha KapoorEconomy Correspondent, Peepals Business
Representative image: Squirrel_photos / Pixabay
Bank Negara Malaysia kept its overnight policy rate at 2.75% on November 5, its last meeting of 2026, saying inflation is contained even as energy costs push prices up.
What Happened
Bank Negara Malaysia (BNM), the country's central bank, kept its benchmark Overnight Policy Rate (OPR) unchanged at 2.75% on Thursday, 5 November 2026, at the last Monetary Policy Committee meeting of the year. The bank said the current rate is consistent with continued price stability and sustainable growth. Governor Abdul Rasheed Ghaffour said the bank saw no immediate need to tighten policy because inflation remains contained, though higher energy costs have pushed it up.
Key Facts
- Decision: OPR held at 2.75%, announced on 5 November 2026.
- Inflation so far this year: headline inflation averaged 1.8% and core inflation 1.9%, according to the bank.
- Outlook: BNM expects both measures to edge higher because of geopolitical developments, high global commodity prices and bad weather, but to stay contained.
- Growth: Malaysia's economy grew 5.3% year on year in the third quarter, and the bank sees full-year 2026 growth above 5%.
- Risks named: a prolonged conflict in the Middle East and lower commodity production.
- Expectations: 17 of 23 economists in a Bloomberg poll correctly predicted a hold; six had forecast a 25-basis-point rise.
- Markets: Malaysia's stock exchange, Bursa Malaysia, closed higher after the decision.
- Next meeting: OCBC expects a 25-basis-point rise to 3% at the 21 January 2027 meeting; HSBC expects a rise in the first quarter of 2027.
Why It Matters
The decision stands out against what other central banks did the same week. The Bank of England raised its rate to 4% on the same day, citing energy prices pushed up by conflict in the Middle East, and Australia's central bank lifted its cash rate to an 18-year high two days earlier. Malaysia, with inflation still under 2%, has chosen to wait.
For businesses and borrowers in Malaysia, an unchanged OPR means loan rates linked to it should stay steady for now. The bank's wording, though, leaves the door open: it expects inflation to rise, and several economists now expect a small increase early next year. A minority of economists already expected one this week.
For India, Malaysia matters as a regional trading partner and as a comparison point. India too is dealing with higher energy prices and pressure on the rupee. Bank Negara's choice shows one way a regional central bank is balancing steady growth against imported inflation.
Peepals calculation: With the OPR at 2.75% and headline inflation averaging 1.8%, Malaysia's policy rate is about 0.95 percentage points above inflation (2.75 − 1.8), or 0.85 points above core inflation (2.75 − 1.9). That positive gap is one reason the bank feels no pressure to act now. In the Bloomberg poll, 17 of 23 economists, about 74% (17 ÷ 23 ≈ 0.739), expected a hold. If the OPR rises by 25 basis points in January, as OCBC expects, the rate would go to 3.00%, about 9% higher than today (0.25 ÷ 2.75 ≈ 0.091). Our calculation from the reported figures.
| Measure | Figure |
|---|---|
| Overnight Policy Rate | 2.75% (unchanged) |
| Headline inflation, year to date | 1.8% |
| Core inflation, year to date | 1.9% |
| GDP growth, July-September 2026 | 5.3% year on year |
| Economists expecting a hold (Bloomberg poll) | 17 of 23 |
Impact
Short-term: Malaysian borrowers see no change in loan costs this year, and the stock market reacted positively. The ringgit had edged up before the decision, according to reports.
Long-term: If energy prices stay high and inflation climbs as the bank expects, Malaysia may join other central banks in raising rates in 2027.
Who is affected: Malaysian households and businesses with loans and deposits, investors in Malaysian markets, and Indian exporters and importers who trade with Malaysia.
What to watch next: BNM's next policy meeting, on 21 January 2027 according to OCBC's forecast note.
Key Takeaway
Bank Negara Malaysia held its OPR at 2.75% on 5 November as inflation stays below 2%, but some economists expect a rise in early 2027.
Questions and Answers
What did Bank Negara Malaysia decide on the OPR?
It kept the Overnight Policy Rate at 2.75% on 5 November 2026, at its final policy meeting of the year.
Why did Bank Negara not raise rates?
The governor said there was no immediate need to tighten policy because inflation remains contained: headline inflation averaged 1.8% and core inflation 1.9% this year.
Will Malaysia raise interest rates in 2027?
The bank has not said so. OCBC expects a 25-basis-point rise to 3% in January 2027, and HSBC expects a rise in the first quarter of 2027.
How does this compare with other central banks?
The Bank of England raised its rate to 4% the same day, citing energy prices, and Australia's central bank raised its rate to an 18-year high two days earlier.
Disclaimer: Prepared by the Peepals newsroom from publicly available sources with AI assistance. Information is accurate to the best of our knowledge at the time of publication and may change. Images may be representative. Not professional advice. Report an error via our contact page.
By Neha Kapoor, Economy CorrespondentCovers Economy and more for Peepals Business. All stories by Neha Kapoor
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Neha Kapoor is a pen name of the Peepals Global Editorial Team, which researches, fact-checks and publishes every story. The portrait is an illustration.
