FX.co ★ Malaysia Holds Key Rate Steady at 3% as Expected

In its May 2025 meeting, the Central Bank of Malaysia decided to maintain its benchmark interest rate at 3%, marking the eleventh consecutive session without a change, in line with market expectations. The central bank emphasized its continued support for economic growth, asserting that the current policy framework remains suitable based on their most recent evaluation of inflation and growth outlooks. In the first quarter of 2025, both headline and core inflation averaged 1.5% and 1.9%, respectively. It is anticipated that overall inflation will remain controllable throughout the remainder of the year due to moderate global cost pressures and diminished domestic demand pressures. Concurrently, preliminary data indicated that the country's annual GDP growth decelerated to a one-year low of 4.4%, down from a 5% increase in the previous quarter. Looking ahead, while domestic demand is expected to continue providing robust support for growth, increasing trade tensions and intensified global policy uncertainties are likely to challenge the external sector.