Malaysia: BNM expected to keep OPR steady through 2026 – UOB

UOB Global Economics & Markets Research reports that Malaysia’s inflation remained stable in January, slightly below its own forecast and in line with consensus. Despite solid 4Q25 GDP, price pressures are seen as contained, reducing the urgency for policy changes. UOB therefore maintains its view that Bank Negara Malaysia will hold the Overnight Policy Rate at 2.75% throughout 2026.

Contained inflation supports steady policy stance

"Malaysia’s headline inflation remained stable at 1.6% y/y in Jan (Dec: 1.6%), in line with Bloomberg consensus but tad lower than our estimate (1.7%)."

"In our view, despite the strength in 4Q25 GDP, inflation remains contained, thus providing little impetus for Bank Negara Malaysia (BNM) to adjust its monetary policy stance in the near term."

"We maintain our view that the Overnight Policy Rate (OPR) will be kept at 2.75% through 2026."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)