KUALA LUMPUR: Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75% today reflects its confidence in the Malaysian economy’s ability to sustain healthy growth in 2026, according to economists.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the Monetary Policy Committee’s (MPC) decision to keep the OPR unchanged was in line with expectations among most economists.
He said the MPC’s tone was fairly balanced, and positive macroeconomic conditions are expected to continue for the rest of the year.
“Hence, we believe the OPR is likely to be maintained at 2.75% in the next MPC meeting in November,” he told Bernama.
Meanwhile, TA Securities Research economist Shazma Juliana Abu Bakar said BNM’s decision reflected its assessments that the current monetary policy stance remains supportive of price stability and sustainable growth.
Looking ahead, she said markets see risks tilted towards a 25 basis points hike in 2027, particularly if major central banks resume monetary tightening.
She said a modest increase in the OPR is not expected to materially affect private consumption, as household spending should remain supported by steady wage growth, a resilient labour market and targeted government assistance.
However, Shazma said the impact of higher borrowing costs could be felt more among interest-sensitive spending, particularly for housing and big-ticket purchases.
“The timing of any adjustment will remain data-dependent, particularly on the pace of US rate hikes and domestic inflation,“ she said, adding that inflation was expected to remain manageable at 2.1% in 2026 and 1.7% in 2027.
BNM kept the OPR unchanged at 2.75% for the seventh consecutive MPC meeting since the 25 basis points cut in July 2025.
The central bank said the latest indicators point to resilient global growth, supported by strong global tech expansion, improving supply conditions, and stable labour markets.
It said that although inflation has edged lower in recent months, it is expected to remain elevated given the lagged pass-through of energy costs to consumer prices.
BNM added that, going forward, while uncertainties surrounding the West Asia conflict will continue to weigh on global growth amid continued inflationary pressures, sustained tech-related spending is expected to cushion the impact.
MBSB Investment Bank Bhd (MBSB IB) has revised its 2026 gross domestic product (GDP) forecast upward to 5.1% from 4.5%, pointing to sustained economic momentum even as output normalises slightly from the 5.2% pace registered in 2025.
The investment bank said, crucially, its macro-outlook assumes the worst of the West Asia conflict has transpired, mitigating severe downside risks to the supply chain.
It said the upgrade captures stronger-than-expected first half of 2026 (1H 2026) momentum, driven by a recent surge in export performance and steady domestic demand.
“Robust domestic fundamentals continue to underpin Malaysia’s resilience against external market volatility; nevertheless, the growth trajectory remains exposed to geopolitical risks and external uncertainties.
On the price outlook, MBSB IB continues to anticipate a potential uptick in inflation to 2% in 2026, up from 1.4% year-on-year, taking into account inflationary pressure, mainly supply-driven but mitigated by ongoing policy measures.
Meanwhile, echoing MBSB IB’s sentiment, RHB Investment Bank Bhd (RHB IB) expects the OPR to remain unchanged at 2.75% into 1H 2027.
It said monetary policy is likely to remain data-dependent at upcoming MPC meetings, with decisions guided by the outlook for economic growth and underlying inflation trends.
RHB IB said that resilient economic fundamentals and manageable inflationary pressures support a broadly stable policy stance, with no immediate need for policy adjustments.
“Nonetheless, lingering uncertainties surrounding geopolitical tensions and unexpected oil supply disruptions among major oil-producing nations could place upward pressure on global energy prices. Should inflation turn out to be higher and more persistent than expected, the possibility of a 25 basis point rate hike cannot be entirely ruled out in the coming months,” it said.
Meanwhile, from a monetary policy perspective, OCBC Bank sees a modest hawkish bias in BNM’s overall assessment at today’s meeting.
It said incoming data, particularly price data, remain a critical input in BNM’s assessment of the room to normalise the policy rate.
Hence, OCBC Bank maintained that the case for normalisation could take some time to manifest in the data.
“BNM has historically been measured in its policy rate adjustments in either direction, and we expect this time to be no different. We continue to expect BNM to normalise its policy rate from 2.75% to 3% in January 2027,” it added.
