{
  "id": 14654442,
  "title": "Malaysia’s central bank chief signals room to act as inflation risks rise",
  "url": "https://urgent.news/2026/10/15/malaysias-central-bank-chief-signals-room-to-act-as-inflation-risks",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-15T08:45:00.000Z",
  "source": {
    "name": "Straits Times Business",
    "slug": "straits-times-business",
    "url": "https://www.straitstimes.com/business/malaysias-central-bank-chief-signals-room-to-act-as-inflation-risks-rise"
  },
  "original_language": "en",
  "account": "KUALA LUMPUR – Malaysia's central bank, Bank Negara Malaysia (BNM), has indicated it has more flexibility to alter interest rates as inflation concerns escalate due to the ongoing Middle East conflict driving up energy prices, according to Governor Abdul Rasheed Ghaffour. Speaking on Bloomberg TV's Avril Hong in a recent interview, Rasheed expressed that the central bank is highly attentive to rising price increases and is prepared to act if necessary. The central bank maintained its benchmark interest rate at 2.75% during its last meeting in September and changed its policy guidance in September, moving away from describing its stance as \"appropriate.\" This shift has given the central bank greater room to respond, should price pressures continue to escalate.\n\nIn the swaps market, traders were pricing in a 76% chance of a rate hike by BNM within the next six months as of October 15, according to Bloomberg's data. Rasheed emphasized that policy decisions are data-dependent and that the Monetary Policy Committee evaluates the latest information at each meeting. He confirmed that the current rate remains aligned with the outlook for inflation and sustainable economic growth.\n\nRasheed noted that despite a surge in global oil prices due to the Middle East war, Malaysia's inflation has remained moderate, mainly due to government subsidies that keep fuel prices among the lowest globally. The country, as a net energy exporter, benefits from its abundant oil and natural gas reserves, protecting it from higher import costs faced by neighboring economies like Thailand and the Philippines.\n\nThe government anticipates inflation to average 1.5%-2.5% in 2026, with consumer prices rising by 1.9% in August from the previous year. Rasheed projected that inflation will stay within the forecast range, although there are risks from a prolonged Middle East conflict and high energy prices. Inflation is expected to increase in early 2027 as higher energy, food, and other input costs trickle down to prices, before gradually easing later in the year, according to government forecasts.\n\nStrong domestic demand and a surge in semiconductor exports have helped Malaysia withstand disruptions caused by the US war against Iran, supporting expectations of continued rapid economic growth in 2026. The government recently raised its 2026 growth forecast to 4.8%-5.3% from 4%-5%, driven by resilient domestic demand and soaring exports. Economic expansion is expected to maintain around 5% in 2027, fueled by sustained domestic demand and investments.\n\nRasheed acknowledged potential risks of a slowdown in the artificial intelligence boom but said Malaysia's electrical and electronics products market remains robust, with order books expanding from six months ago to between 12 to 18 months. The Malaysian ringgit has held steady in 2026, despite the Indonesian rupiah and Philippine peso hitting record lows, and has even edged up about 0.6% against the dollar after becoming the top-performing currency in Asia in 2025. The central bank has been encouraging businesses, exporters, and investors to repatriate and convert their foreign-currency income, and Malaysian bonds have shown increased volatility, with a wider yield gap in recent months.",
  "summary": "Bank Negara Malaysia kept its benchmark interest rate at 2.75% at its last meeting in September.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}