Vietnam allows foreign banks to use local accounts for international transfers
1 hour ago
Balancing economic momentum against stable price dynamics, Malaysia’s central bank is set to maintain its monetary policy baseline, The Edge Malaysia reports. In a survey of 22 economists published ahead of the Monetary Policy Committee (MPC) decision on September 3, Bank Negara Malaysia (BNM) is widely expected to hold its Overnight Policy Rate (OPR) at 2.75%. Out of 22 surveyed economists, 20 predict BNM will keep rates unchanged, while two forecast a quarter-point hike
BNM has maintained the 2.75% benchmark since delivering a preemptive 25 basis point rate cut in July 2025 to shield domestic growth from US trade tariff headwinds. Under BNM Governor Datuk Seri Abdul Rasheed Ghaffour, monetary policy prioritises price stability alongside long-term growth. Headline inflation dropped to 1.8% year-on-year in July 2026, well within BNM's annual forecast target of 1.5% to 2.5%. Subdued consumer prices are supported by Malaysia's status as a net energy exporter and government fuel subsidies.
Meanwhile, the economy expanded 6.0% y/y in Q2 2026, surpassing BNM's full-year target range of 4.0% to 5.0%. Growth was driven by strong tech exports tied to the global artificial intelligence boom and steady domestic demand. Analysts at Maybank Securities and UOB noted that while near-term rates remain on hold, resilient growth could pave the way for policy normalisation toward a neutral 3.00% OPR rate by 2027.
To support economic expansion while maintaining price stability, central banks balance interest rates against inflation trends and fiscal cushions. BNM’s monetary policy decision highlights primary macroeconomic developments for Malaysia, such as maintaining policy stability Amid a strong Q2 growth. Holding the OPR at 2.75% provides continued support for domestic investment while BNM monitors global economic conditions.
Encouraging state-owned and corporate entities to repatriate foreign earnings helps buffer the Ringgit against US dollar strength and global bond yield shifts. As economic growth outpaces initial forecasts, market focus will gradually shift toward rate normalisation over the next 12 to 18 months.
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