Malaysian Ringgit: BNM seen on steady policy path – DBS

DBS Group strategists Taimur Baig and Nathan Chow expect Bank Negara Malaysia (BNM) to keep its Overnight Policy Rate unchanged at 2.75% on September 3, maintaining the stance adopted after its July 2025 insurance cut. They highlight contained Malaysian inflation and robust 2026 growth near 5%, arguing there is little urgency for rate hikes despite some market expectations.

BNM expected to stay on hold

“We expect BNM to maintain its Overnight Policy Rate (OPR) at 2.75% on September 3, unchanged since its 25bps insurance rate cut in July 2025.”

“The central bank will likely continue assessing that the current monetary policy stance remains conducive to supporting economic growth amid ongoing price stability.”

“As a result, overall growth could be around 5% in 2026.”

“While some market participants expect BNM to reverse its previous insurance easing with a rate hike over the next couple of meetings, we see little urgency for the central bank to do so.”

“Malaysia‘s headline inflation has remained contained despite the Middle East shock, easing to 1.8% yoy in July 2026, the lowest since March, and within policymakers’ 2026 average forecast of 1.5-2.5%.”

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