Kenanga IB Sees BNM Maintaining OPR At 2.75 Pct Through 2026

KUALA LUMPUR, March 6 (Bernama) -- Bank Negara Malaysia (BNM) is expected to maintain the overnight policy rate (OPR) at 2.75 per cent through 2026, supported by manageable inflation and resilient domestic economic conditions, according to Kenanga Investment Bank Bhd (Kenanga IB). 

The investment bank said Malaysia’s inflation remains contained, but the escalating Middle East conflict could raise energy prices and push inflation higher.

“A prolonged disruption in the Strait of Hormuz could revive global inflationary pressures and tighten external financial conditions, although the domestic pass-through is expected to remain manageable and consistent with BNM’s expectation that inflation will stay moderate.

“Malaysia continues to face external risks (but) from a position of strength, supported by resilient domestic demand and investment activity, BNM is therefore expected to remain patient and maintain the OPR at 2.75 per cent through 2026,” it said in a note.

Kenanga IB is maintaining its US dollar/ringgit (USD/MYR) year-end 2026 forecast at 3.95, compared with 4.06 in 2025. “We maintain our end-2026 target of RM3.95 (versus the greenback), though the risk distribution has widened materially due to a structural ‘de-commoditisation’ of the ringgit. If Brent crude sustains above US$100 per barrel, the ringgit could face six to nine per cent depreciation pressure from higher oil prices, compounded by safe-haven demand for the US dollar,” it said.

It added that while the ringgit’s medium- to long-term outlook remains supported by Malaysia’s resilient external position and a weaker structural outlook for the US dollar, the currency no longer benefits from higher oil prices, making the duration of the conflict a key factor for its performance.

Earlier, it was reported that BNM's international reserves stood at US$128.3 billion as of Feb 27, 2026. The central bank said the reserves position was sufficient to finance 4.7 months of imports of goods and services and was equivalent to 0.9 times the country's total short-term external debt. 

-- BERNAMA