KUALA LUMPUR: Bank Negara is expected to adopt a dovish stance at its upcoming Monetary Policy Committee (MPC) meeting this Thursday, says Maybank Investment Bank Bhd (Maybank IB).
It said such a stance would indicate the central bank’s willingness to ease policy if necessary, while maintaining the overnight policy rate (OPR) at 3%, should data show the economy remains resilient.
In a research note yesterday, Maybank IB said the likely timing for a potential rate cut would be in the second half of 2025 (2H25), with the July MPC meeting being the earliest window for Bank Negara to ease.
“A later cut in September or November is also possible if economic data doesn’t deteriorate as quickly as feared,” the research house said.
Maybank IB said back-to-back Bank Negara rate cuts are not warranted at this juncture as absent of an economic or global financial crisis, the central bank typically adopts a moderate monetary policy approach, adjusting the policy rate at a measured pace.
“Moreover, US President Donald Trump’s tariff policies are subject to change, with negotiations still ongoing. We believe policymakers are attentive to both downside risks to growth and upside risks to inflation,” it added.
Maybank IB said given monetary policy works with a lag, the likely rate path ahead is a single 25-basis-point (bps) cut in 2H25, followed by pauses to assess changes in economic conditions and global geopolitical tensions before considering further actions.
According to Maybank IB, the upcoming Bank Negara MPC meeting will likely draw close attention from market participants, following two years of consecutive holds that have largely been non-events since the last hike in May 2023.
“Trade tensions have altered the balance of risks to domestic growth and inflation,” it said. — Bernama
