Malaysia holds key rate steady, but warns of uncertainties from Middle East conflict

Malaysia's central bank has maintained its benchmark interest rate at 2.75% for the fifth consecutive meeting, citing modest inflation and steady growth despite energy supply disruptions from the Middle East conflict. The bank noted that uncertainties from the conflict could impact domestic growth and inflation, although Malaysia's strong fundamentals are expected to support economic resilience. The economy is projected to grow between 4%-5% this year, with inflation averaging 1.6% and 2.1% in the first quarter of 2026. Most economists expect no change in the policy rate for the remainder of the year.