PETALING JAYA: Bank Negara Malaysia’s (BNM) benchmark interest rate is expected to remain at its current level through next year, with most research houses pointing to a steady overnight policy rate (OPR) of 2.75%.
This is based on their forecast of firm domestic demand, even as global uncertainties continue to cloud the outlook.
While a bumpy path in 2026 is anticipated, analysts said any further adjustment would depend on the impact of trade tensions and the government’s fiscal stance.
Kenanga Research has kept to its view that the central bank would maintain the OPR at 2.75% through 2025, though it cautioned that 2026 could prove bumpy as the delayed effects of higher US tariffs may trigger policy adjustments.
The research house highlighted that the OPR, at a 29-month low, would continue to support domestic growth, with its impact on the real economy still working through.
It added that while services are set to remain the main driver of supply-side momentum, external headwinds could limit further gains.
“We maintain our 2025 gross domestic product (GDP) growth forecast at 4.3% (2024: 5.1%),” it said.
CGSI Research observed that BNM’s decision to maintain the OPR last week reflected the potential resilience of the Malaysian economy on the back of the highly uncertain trade environment.
It expected no hike at the Monetary Policy Committee (MPC) meeting in November 2025, keeping the year-end and 2026 forecast rate unchanged at 2.75%.
HLIB Research also expected for the OPR to stay put until year-end, but cautioned that growth remained vulnerable to shifting trade dynamics.
“In the near term, key developments to monitor include the trajectory of ongoing US trade negotiations particularly with China, any announcements on semiconductor tariffs, announcement on the RON95 subsidy rationalisation by end of September as well as the tabling of Budget 2026 on Oct 10,” it said.
CIMB Research stressed that BNM continued to reassess the impact of July’s pre-emptive 25 basis point cut, while flagging that muted inflation into 2026 would provide room for flexibility.
“We maintain our view that the OPR will remain at 2.75% through 2025, though additional cuts cannot be ruled out should trade weakness deepen and GDP growth risk slipping below the lower band of BNM’s 4% to 4.8% forecast range,” the research house said.
TA Research highlighted that the final MPC meeting of the year, scheduled for Nov 6, would be guided by fresh GDP data, updated trade statistics, and fiscal policy signals.
“Our 2025 GDP forecast remains unchanged at 4.4% year-on-year, though the balance of risks continues to lean to the downside,” it wrote, warning that higher tariffs and weaker business sentiment could weigh on consumption and investment.
BIMB Research highlighted a shift in tone, with policymakers striking a less dovish stance than in July.
Citing the central bank’s language, the research house said: “At the current OPR level, the monetary policy stance is appropriate and supportive of the economy amid price stability.”
It argued that the July rate cut was a one-off move rather than the start of an easing cycle, adding that with tariff risks easing and consumption resilient, current conditions did not point to another rate cut in 2026.
