KUALA LUMPUR, March 24 — Bank Negara Malaysia (BNM) says Malaysia’s economy is primarily driven by domestic factors, despite the escalating US tariffs impacting global growth.
It stated that it is taking a cautious stance on global tensions and acknowledged that restrictive trade policies and geopolitical uncertainties pose risks to Malaysia’s economic outlook.
Speaking at the launch of BNM’s Economic and Monetary Review 2024, BNM governor Datuk Seri Abdul Rasheed Ghaffour stressed that Malaysia’s policy decisions, including rate adjustments, would be based on domestic considerations rather than external monetary shifts.
“We’ve identified key downside risks that could derail growth including more restrictive trade policies and stronger economic measures by other countries which could affect trade inflation and overall economic activity.
He said that the US’s imposition of tariffs on imports could weaken businesses, thus slowing consumer spending globally. This, in turn, could have a spillover effect on Malaysia’s exports. When asked if interest rate cuts were a possibility, he said that BNM’s monetary policies remain independent and data driven.
“Actually, our working policy is domestic driven.
“We look at the domestic conditions. Not so much what happens elsewhere. What happens elsewhere, we look at it as how that element has an impact on our growth and integration,” Abdul Rasheed explained, adding that the focus is on domestic considerations, rather than on who is making rate cuts.
He emphasised that priority remains on what is best for the country’s economy.
According to him, Malaysia’s Overnight Policy Rate (OPR) remains at 3 per cent, a level deemed appropriate based on the central bank’s current assessment of economic conditions.
He stated that BNM will continue evaluating evolving global and domestic conditions, including inflationary pressures and demand trends, before making any policy adjustments.
Despite global economic uncertainties, BNM remains confident in Malaysia’s economic resilience. The central bank has projected a GDP growth rate of between 4.5 and 5.5 per cent for 2025.
Abdul Rasheed said BNM will hold six monetary policy meetings in a year to reassess economic conditions and determine the necessary policy adjustments.
The White House is preparing to impose tariffs on key trading partners next week that many fear could deal a painful blow to the global economy. US President Donald Trump is considering a more targeted approach to the levies, which are expected to kick in on April 2.
