--- title: "Malaysia Central Bank Holds Steady as It Gauges Mideast War Impact—Update" type: "News" locale: "en" url: "https://longbridge.com/en/news/285510850.md" description: "Malaysia's central bank, Bank Negara, has maintained its overnight policy rate at 2.75% amid contained inflation and economic resilience despite disruptions from the Middle East conflict. The decision aligns with forecasts from economists and reflects Malaysia's position as a net energy exporter, though it remains vulnerable to oil price fluctuations. The bank anticipates continued economic growth supported by domestic demand and exports, while inflation is expected to remain manageable through 2026, aided by government subsidies. However, rising subsidy costs may impact fiscal targets." datetime: "2026-05-07T08:25:33.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/285510850.md) - [en](https://longbridge.com/en/news/285510850.md) - [zh-HK](https://longbridge.com/zh-HK/news/285510850.md) --- # Malaysia Central Bank Holds Steady as It Gauges Mideast War Impact—Update By Ying Xian Wong KUALA LUMPUR, Malaysia--Malaysia's central bank once again left interest rates unchanged as inflation remains contained and the economy shows resilience amid disruptions caused by the Middle East conflict. Bank Negara Malaysia kept its overnight policy rate at 2.75% on Thursday, holding steady since it delivered a 25-basis-point cut in July last year. The decision was forecast by all eight economists polled by The Wall Street Journal. As one of Asia's few net energy exporters, Malaysia is better positioned than many of its regional peers to absorb energy shocks, although its reliance on imported crude oil from the Middle East still leaves it exposed to some risk. The central bank noted uncertainties arising from the ongoing Middle East conflict, saying the impact on the global and Malaysian economies will depend on how the situation develops. "At the current OPR level, the MPC considers the monetary policy stance to be appropriate and consistent with the outlook of continued price stability and sustainable economic growth," Bank Negara said in a statement. The economy likely sustained growth momentum in the first quarter, supported by resilient domestic demand and strong exports, the central bank said. Despite uncertainties linked to the Middle East conflict, strong fundamentals should sustain the economy's resilience, it added, noting employment and wage growth will continue to support household spending, with investment backed by public and private sector projects. BNM sees exports likely to benefit from robust electrical and electronics shipment as contribution from tourism remains steady but moderate. Domestic inflation is seen to be pushed higher from higher global commodity prices as the conflict in the Middle East continues. The central bank sees headline and core inflation to remain contained in 2026, as domestic policies and stable demand mitigate the pass-through of these external costs. With ongoing disruptions in the Strait of Hormuz, the Malaysian government noted that the country has enough fuel supplies to meet domestic demand through June. The government is spending roughly 5 billion ringgit a month, equivalent to about $1.27 billion, to subsidize RON95, the nation's most widely used petrol grade, helping to keep domestic inflation in check. But that relief comes at a cost, HSBC economists Yun Liu and Madhurima Nag said. They said the rising subsidies bill is putting pressure on Malaysia's fiscal position and could jeopardize the government's 2026 budget-deficit target of 3.5% of gross domestic product. Capital Economics sees such measures, coped with consumer spending and data-center investment to boost demand, expecting growth to "hold up pretty well," said senior Asia economist Gareth Leather. Leather expects BNM to hold rates steady throughout 2026, adding inflation sits at "a level with which policymakers are likely to be very comfortable." Write to Ying Xian Wong at yingxian.wong@wsj.com (END) Dow Jones Newswires May 07, 2026 04:09 ET (08:09 GMT) Copyright (c) 2026 Dow Jones & Company, Inc. ### Related Stocks - [1560.JP](https://longbridge.com/en/quote/1560.JP.md) - [EWM.US](https://longbridge.com/en/quote/EWM.US.md) - [HMYR.UK](https://longbridge.com/en/quote/HMYR.UK.md) - [00005.HK](https://longbridge.com/en/quote/00005.HK.md) - [HSBC.US](https://longbridge.com/en/quote/HSBC.US.md) - [HSBA.UK](https://longbridge.com/en/quote/HSBA.UK.md) - [DTIW.SG](https://longbridge.com/en/quote/DTIW.SG.md) ## Related News & Research - [$92 to fill up a Camry? 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