By Ying Xian Wong


KUALA LUMPUR--Malaysia's central bank once again left rates on hold as economic stability gave it room to keep policy settings steady even as Middle East tensions flare.

Bank Negara Malaysia on Thursday left its overnight policy rate at 2.75%, extending a pause stretching back to July last year, when it delivered a 25-basis-point cut due to threats to the economy from external uncertainties.

All nine economists polled by The Wall Street Journal had expected the central bank to stand pat.

"At the current OPR level, the MPC considers the monetary policy stance to be appropriate and consistent with the outlook of continued price stability and sustainable economic growth," Bank Negara said in a statement.

Central banks across the region have taken different approaches as inflation and economic conditions evolve. Many have tilted more hawkish in the first quarter as the Iran war drove up oil and gas prices, opting to stave off an inflation shock at the risk of stymieing growth.

A U.S.-Iran truce dialed back expectations of further rate hikes but a fresh resurgence of hostilities recently underlines the fact that geopolitical headwinds are far from over.

Malaysia's economy has remained resilient so far, with growth holding up and inflation still contained, offering BNM the space to stay on the sidelines.

Still, economists expect growth to moderate in the second half of the year as higher costs, trade uncertainty and geopolitical tensions weigh on business activity and consumer spending.


Write to Ying Xian Wong at yingxian.wong@wsj.com


(END) Dow Jones Newswires

07-09-26 0317ET