BNM Expected To Hold OPR At 2.75 Pct Through Remainder Of 2025, Say Analysts

KUALA LUMPUR, Sept 4 (Bernama) -- Bank Negara Malaysia (BNM) is expected to keep the overnight policy rate (OPR) at 2.75 per cent through the remainder of 2025, assuming that Malaysia's economic growth stays within the official 4.0-4.8 per cent range and inflation remains contained, said an investment bank. 

RHB Investment Bank Bhd said Malaysia’s domestic demand is resilient despite external risks, underpinned by a robust labour market, policy support and sustained investments in infrastructure and development initiatives.

"Looking ahead to 2026, we view monetary policy as likely to remain data-dependent, with outcomes hinging on factors such as the impact of tariff policies on Malaysia’s trade performance and the momentum of domestic consumption. 

"Current developments, including signs of easing global tariff and trade tensions, alongside solid domestic demand, do not suggest another OPR cut in 2026," it said in a research note today.

Kenanga Investment Bank Bhd agrees that BNM is likely to keep the OPR unchanged through the rest of the year, although “2026 may be bumpy as the lagged impact of higher US tariffs could prompt policy adjustment.”

"Overall, the latest statement carries a neutral tone. OPR is now at a 29-month low and remains supportive of domestic growth. Transmission to the real economy is still unfolding. Looking into 2026, the policy direction will also hinge on fiscal policy support, with the federal government likely to table a mildly expansionary budget for 2026," it said, warning that external risks may dominate, particularly from US policy uncertainty. 

It noted that Malaysia remains exposed to spillover impact if US-China trade frictions worsen, or if US President Donald Trump targets BRICS-linked economies.  "Should domestic demand falter amid weaker sentiment, BNM has room to ease policy further," it said.

OCBC Malaysia's senior ASEAN economist Lavanya Venkateswaran said the bank continues to see room for BNM to lower its policy rate by an additional 25 basis points (bps).

"The timing of this rate cut, however, is less certain, considering BNM will likely need to see consistently disappointing data to consider further easing. 

"We expect the data for August onward to show some weakness and will monitor the incoming data prints, including August and September trade, August industrial production, wholesale and retail trade, as well as the advance third quarter GDP print, to assess BNM’s next move at its Nov 6 meeting," she said.  In addition, she said the budget announcement on Oct 10, 2025, will also be important to the interest rate outlook.

-- BERNAMA