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Malaysia Interest Rate

Malaysia Interest Rate

Overnight Policy Rate in Malaysia

The Overnight Policy Rate (%, eop) ended 2024 at 3.00%, unchanged from the 3.00% end-2024 value and down from the reading of 3.25% a decade earlier. For reference, the average interest rate in ASEAN was 4.86% at end-2024. For more information on interest rate, visit our dedicated page.

Malaysia Interest Rate Chart

Note: This chart displays Policy Interest Rate (%) for Malaysia from 2024 to 2021.
Source: Macrobond.

Malaysia Interest Rate Data

2020 2021 2022 2023 2024
Overnight Policy Rate (%, eop) 1.75 1.75 2.75 3.00 3.00
3-Month KLIBOR (%, eop) 1.94 2.05 3.68 3.77 3.73
10-Year Bond Yield (%, eop) 2.65 3.58 4.09 3.73 3.81

Central Bank cuts rates in July

Latest bank decision: At its meeting on 9 July, Bank Negara Malaysia (BNM) decided to reduce the overnight policy rate (OPR) by 25 basis points to 2.75%, with the ceiling and floor rates of the corridor of the OPR correspondingly reduced to 3.00% and 2.50%, respectively. The cut was the first in five years. For the past two years, the BNM has been keeping rates steady.

Risks to GDP growth drive hold: The Bank said its decision aimed to support the economy: The BNM noted that risks to GDP growth are tilted to the downside due to weaker global trade, softer economic sentiment and lower-than-projected commodity output. Moreover, the Bank expects inflation to remain controlled in the near term, giving room for a rate cut.

BNM to hit the brakes again: Going forward, the majority of our panelists expect rates to remain at current levels, while the rest anticipate a 25 basis point cut. Softer-than-expected GDP growth, particularly due to intensifying frictions in global trade, poses a downside risk to the policy rate. The Bank will reconvene on 4 September.

Panelist insight: Nomura’s Euben Paracuelles and Yiru Chen said: “We forecast that BNM will leave the OPR unchanged at 2.75% for the remaining two meetings of the year (4 September and 6 November), and throughout 2026. […] We think BNM’s cut is seen by the MPC as insurance against the materialization of downside risks, which stem from higher global trade policy uncertainty.” EIU analysts said: “We assign a 60% probability to BNM leaving its policy rate unchanged at 2.75% in 2025. The likelihood of a further cut, though not negligible (40% probability), will hinge on the trajectory of upcoming data for GDP (out on July 18th) and inflation (July 22nd). Signs of persistent economic softness or downside surprises in inflation could tip the balance toward another rate reduction.”

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Malaysian interest rate projections for the next ten years from a panel of 22 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Malaysian interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Malaysian interest rate projections.

Want to get access to the full dataset of Malaysian interest rate forecasts? Send an email to info@focus-economics.com.

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