KUALA LUMPUR (Nov 6): Bank Negara Malaysia (BNM) has kept the overnight policy rate (OPR) unchanged at 3%, as widely expected, as it noted the continued expansion of the global economy and the sustained strength of domestic economic activities with inflation remaining "modest".

The benchmark interest rate decision was made by its Monetary Policy Committee (MPC) at its sixth and final meeting for the year on Wednesday.

"At the current OPR level, the monetary policy stance remains supportive of the economy and is consistent with the current assessment of inflation and growth prospects.

"The MPC remains vigilant to ongoing developments to inform the assessment on the domestic inflation and growth trajectories going into 2025. The MPC will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability," BNM said in a statement.

A Bloomberg poll of economists showed all had expected the central bank to leave the benchmark interest rate unchanged.

Global growth is expected to be sustained by positive labour market conditions, moderating inflation and less restrictive monetary policy, BNM said.

On the domestic side, it said the latest indicators point towards sustained strength in domestic economic activity driven by resilient domestic expenditure and higher export activity.

"Going forward, exports are expected to be supported by the global tech upcycle, continued strength in non-E&E goods, and higher tourist spending. Employment and wage growth, as well as policy measures, remain supportive of household spending.

"The robust expansion in investment activity would be sustained by the progress of multi-year projects in both the private and public sectors, the higher realisation of approved investments, as well as the implementation of catalytic initiatives under the national master plans," the central bank said.

Headline and core inflation, which it said remained modest and averaged 1.8% year to date, is expected to remain manageable going into 2025 amid the easing global cost conditions and the absence of excessive domestic demand pressures.

"Nevertheless, the inflation outlook remains subject to the details of the implementation of announced domestic policy measures. Upside risk to inflation would be dependent on the extent of spillover effects of domestic policy measures, as well as global commodity prices and financial market developments," it said.

The ringgit's performance, meanwhile, continues to be primarily driven by external factors, it said.

"The outcome of the US elections could heighten volatility in the near term. Looking ahead, the narrowing interest rate differentials between Malaysia and the advanced economies is positive for the ringgit.

"Malaysia’s favourable economic prospects and domestic structural reforms, complemented by ongoing initiatives to encourage flows, will continue to provide enduring support to the ringgit," it added.