KUALA LUMPUR: BMI, a unit of Fitch Solutions, expects Bank Negara Malaysia (BNM) to leave the overnight policy rate (OPR) on hold at 2.75 per cent at its next meeting on July 9, following the central bank’s May 7 rate decision.
BMI said there was little concern on the inflation front, with headline inflation edging higher to 1.7 per cent in March from 1.4 per cent year-on-year (y-o-y) in February 2026 as unsubsidised fuel prices spiked.
"However, the inflation rate remains comfortably between the government’s target for inflation to average 1.5 per cent to 2.5 per cent and the long-term average of 2.0 per cent,” it said in a note.
BMI was also confident that BNM would leave the OPR on hold at 2.75 per cent for the rest of the year.
"While BNM acknowledged that elevated global commodity prices will probably nudge inflation higher, it reiterated its expectation for the impact to ‘remain contained’ as ongoing subsidy measures will keep a lid on price pressures.
"We are aligned on this and have retained our forecast for inflation to average 1.9 per cent in 2026,” it said.
On export performance, BMi said that the external sector remained resilient, with timely data showing exports rising 12.7 per cent y-o-y in the first quarter of 2026, supported in large part by artificial intelligence-related tailwinds.
"Looking ahead, we expect the trade surplus to remain robust as the ongoing semiconductor upcycle shows little sign of moderation.
"This suggests that exports of electronics and electrical goods, which remain closely tied to that of global semiconductor sales, will help strengthen Malaysia’s trade position,” it said. - Bernama
