DBS Group Research expects Bank Negara Malaysia to keep its overnight policy rate unchanged at 2.75 percent at its final meeting of 2026, on 5 November. The bank’s economists, led by Taimur Baig, also said normalisation of monetary policy could slip into the first half of 2027.
Growth and exports strengthen
Advance estimates put third-quarter GDP growth at 5.3 percent from a year earlier. Exports rose 54.5 percent in September, a five-year high, with the artificial intelligence boom cited as a major driver.
Inflation has stayed in the lower half of the official 2026 forecast range of 1.5 to 2.5 percent. Headline inflation eased to 1.8 percent in September from 1.9 percent in August. Core inflation was 1.7 percent in September.
Central bank signals caution
Governor Abdul Rasheed Ghaffour told Bloomberg on 15 October that the central bank has room to adjust policy if needed. He said policymakers remain vigilant about upside inflation pressures and that decisions will depend on incoming data.
DBS noted that the bank opened the door to normalisation at its September review. Fuel subsidies have limited the pass-through of higher upstream costs to consumer prices, which DBS sees as a reason for patience.
Related: StanChart sees BoK holding at 3.00% into November · Bank Indonesia holds rate at 5.75% as inflation edges up to 3.28%
Source: DBS Group Research
