KUALA LUMPUR: BMI maintained its view that Bank Negara Malaysia (BNM) will leave the overnight policy rate (OPR) unchanged at 2.75 per cent for the rest of 2026 amid support from resilient domestic demand.
In a note today, the unit of Fitch Solutions said minutes from BNM’s November 2025 meeting showed that its assessment of the 2026 growth outlook remains unchanged from the September meeting, noting support from resilient domestic demand.
"We are aligned with the bank and expect growth to slow from an estimated 4.6 per cent in 2025 to 4.1 per cent in 2026, the lower end of the BNM’s forecast of 4.0 per cent-4.5 per cent,” BMI said.
BMI noted that the central bank had minimal concerns about inflation for now, as headline inflation has largely turned out as expected, averaging 1.4 per cent between January 2025 and November 2025.
"On account of the second phase of wage increases for civil servants in January 2026 and the second RM100 cash handout to all citizens in February, we have revised up our forecast for inflation to average 1.9 per cent in 2026, from 1.7 per cent previously,” it added.
BMI said the revised forecast sits at the upper bound of the Malaysian government’s forecast of 1.3 per cent to 2.0 per cent but is broadly in line with its 2020-2024 average of 1.8 per cent.
The research firm has also revised its foreign exchange forecast, now expecting the ringgit to reach RM4 per US dollar by the end of 2026.
"Our Americas team has recently revised down its rate forecast and now expects the federal funds rate to be cut by an additional 50 basis points to a terminal rate of 3.25 per cent, from our previous forecast of 3.50 per cent.
"With BNM standing pat, this means that yield differentials should move in the ringgit’s favour,” BMI said. - Bernama
