OPR watch
ATTENTION will be on Bank Negara Malaysia’s (BNM) fifth Monetary Policy Committee (MPC) meeting of the year this week, with the holiday-shortened week offering limited economic data.
Economists broadly expect policymakers to leave the overnight policy rate (OPR) unchanged at 2.75%.
A Bloomberg poll showed six of the seven economists forecasting no change, while one expects a 25-basis-point (bps) cut to 2.5%.
Kenanga Research expects BNM to maintain the OPR at 2.75%, leaving the ringgit largely driven by global interest rate movements and US dollar positioning.
UOB Global Economics & Markets Research economists Julia Goh and Jasrine Loke also expect the central bank to stand pat, in line with the consensus view.
Given benign domestic inflation, uneven sectoral growth momentum and persistent volatility in global financial markets, they expect BNM to maintain a cautious, data-dependent stance while closely monitoring external developments.
The central bank last adjusted the benchmark rate in July 2025, when it cut the OPR by 25 bps to 2.75%, marking its first rate change since May 2023.
It has kept the rate unchanged since.
On the data front, the S&P Global Malaysia Manufacturing purchasing managers’ index (PMI) is also due this week, providing insights into new orders, output, employment trends and input costs across trade-exposed sectors.
Meanwhile, Bursa Malaysia and its subsidiaries will be closed today in conjunction with the National Day public holiday.
Inflation data
INDONESIA, South Korea and the Philippines are set to release inflation data this week.
According to Bloomberg estimates, Indonesia’s headline inflation is expected to rise 0.33% month-on-month and 3.14% year-on-year (y-o-y), compared with a 0.14% monthly decline and 2.88% annual increase in July.
Core inflation is forecast to edge up to 2.80% year-on-year from 2.76% in July.
In South Korea, headline inflation is expected to rise 0.2% month-on-month and 3.1% y-o-y, according to Bloomberg estimates, compared with a 0.2% monthly decline and 2.8% annual increase in July.
Core inflation is forecast to accelerate to 3.6% y-o-y from 2.6% in July.
ING expects headline inflation in the Philippines to soften modestly to 6.0% y-o-y amid lower retail fuel prices.
Core inflation pressures, though, should remain elevated, with food inflation continuing to pick up.
Manufacturing PMI
ASIA’s manufacturing PMI data this week will offer fresh insights into regional demand and supply conditions amid geopolitical tensions.
ING expects China’s manufacturing and non-manufacturing PMIs for August to improve modestly to 49.5 and 49.4, respectively.
Meanwhile, Bloomberg estimates China’s official manufacturing PMI will rise to 49.5 in August from 49.2 in July, while the non-manufacturing PMI is expected to increase to 49.5 from 49.
