KUALA LUMPUR: Analysts have expected Bank Negara Malaysia (BNM) to maintain the benchmark rate at 2.75 per cent in 2026 despite the United States central bank’s latest rate cut.
The US Federal Reserve (Fed) lowered the key lending rate by 25 basis points (bps) to 3.50-3.75 per cent in its two-day meeting that ended Dec 10, 2025.
This was the third rate cut in 2025, with the first on Sept 17, when the Fed lowered the federal funds rate by 25 bps to 4.00-4.25 per cent. The second cut came on Oct 29, when the Fed again trimmed rates by 25 bps to 3.75-4.00 per cent.
Commenting on this, Apex Securities Bhd said it sees limited implications for BNM’s monetary policy, with the Overnight Policy Rate (OPR) expected to remain at 2.75 per cent through 2026, as policy stays accommodative amid firmer domestic demand and improving external conditions.
As a rate cut generally puts downward pressure on US Treasury (UST) yields, Apex said a mild downward bias in UST yields should lend support to the ringgit.
"A more dovish Fed or a stronger-than-expected trade environment could provide upside, potentially pushing the US dollar-ringgit towards 4.05-4.10 in 2026,” it said.
Echoing Apex’s views, Hong Leong Investment Bank Bhd (HLIB) also anticipated the central bank to keep the OPR unchanged at 2.75 per cent in 2026.
"The committee continues to view the current policy stance as appropriate and supportive of economic growth amid stable prices,” it said in a separate note.
Meanwhile, Kenanga Investment Bank Bhd
(Kenanga IB) said markets now priced in two more Fed rate cuts in 2026 - one in April and another in September - following the recent adjustment.
"Incoming data should justify two more cuts. For now, the Fed sees limited need for further easing, but greater clarity on unemployment in the coming weeks could shift the balance,” it said.
Kenanga IB opined that inflation looks unlikely to reaccelerate, especially as tariffs are feeding through more slowly and less forcefully than feared.
"We had preferred a January cut, but noted that the Fed now has room to wait and may only move in March when data visibility improves.
"A second cut may come in June, by which time (US Fed chair) Jerome Powell will be replaced by a new chair (as his term as chair ends in May),” it added. - Bernama
