Bank Negara Malaysia held its Overnight Policy Rate at 2.75 percent at its final policy meeting of 2026. The statement kept a mildly hawkish tone but did not signal an imminent hike.
Growth outlook upgraded
The central bank raised its 2026 growth assessment to above 5 percent, from around 5 percent previously. It cited robust exports, sustained domestic demand and investment.
Bank Negara sees no immediate need to raise rates. Headline inflation averaged 1.8 percent and core inflation 1.9 percent in the first nine months of 2026.
Inflation expected to edge higher
The central bank expects both headline and core inflation to edge higher in 2027. Elevated global commodity prices, geopolitical tensions and adverse weather are the main drivers.
Commerzbank analysts Charlie Lay and Henry Hao expect a 25 basis point hike in the first quarter of 2027. That would take the policy rate to 3.00 percent.
Ringgit outlook
Commerzbank sees USD/MYR consolidating between 4.00 and 4.10. The near-term direction depends on global risk sentiment, the dollar, Fed expectations and oil prices.
Related: DBS sees Bank Negara holding Malaysia's rate at 2.75% in November · Brazil's central bank halts rate cuts, holds Selic at 13.75%
Source: Bank Negara Malaysia
