FX.co ★ Malaysia Holds Rates Steady as Expected

The Central Bank of Malaysia maintained its benchmark interest rate at 2.75% during the August 2025 policy meeting, meeting market expectations. The Board confirmed that this decision remains appropriate and supportive of economic conditions amid stable pricing. The average headline inflation rate recorded was 1.4% over the first seven months of the year and is anticipated to remain at moderate levels through 2025 and 2026, due to subdued global cost pressures. Core inflation, which averaged 1.9% during the same timeframe, is predicted to remain stable and close to its historical average, indicating a consistent pace of economic activity without any significant demand-driven inflation pressures. Concurrently, Malaysia’s economy grew by 4.4% in the first half of 2025, with projections for the full year ranging between 4.0% and 4.8%. This growth forecast is bolstered by strong consumer spending and robust investment momentum. Looking forward to 2026, it is expected that domestic demand will continue to be strong and serve as the main driver of economic growth.