KUALA LUMPUR, Nov 19 — OCBC expects a 25 basis point (bp) rate cut from Bank Negara Malaysia (BNM) next year, likely in the second quarter of 2026 (2Q 2026).
Its forecast for softer economic growth and limited room for broad-based fiscal support suggests that monetary policy still has some wiggle room, particularly since inflationary pressures have been largely well-managed.
“We expect monetary policy to remain nimble. We are comfortable with our forecast for another 25 bp rate cut from BNM next year, likely in 2Q 2026,” OCBC said in its Global Economic Outlook 1H 2026 report today.
It added that the government’s subsidy rationalisation efforts have been well executed, noting that while prices of targeted items rose in 2025, overall headline and core inflation remained in check.
“The risk to our call for another 25 bp rate cut is that gross domestic product growth does not slow as we anticipate, and this will allow the central bank to remain on prolonged hold in 2026,” OCBC said.
Currently, BNM’s overnight policy rate stands at 2.75 per cent.
