KUALA LUMPUR: MIDF Amanah Investment Bank does not expect Bank Negara Malaysia’s recent 25-basis-point cut in the Overnight Policy Rate (OPR) to signal the beginning of a near-term rate-cutting cycle.
The bank highlighted resilient domestic spending and a stable labour market as key reasons for this outlook.
“We opine that a targeted support to assist specific industries will be a better approach moving forward instead of further OPR adjustments, at least for the rest of the year,“ the investment bank said in a research note.
RHB Investment Bank shared a similar view, projecting the OPR to remain at 2.75 per cent for the rest of 2025, provided Malaysia’s GDP growth stays within the 4.0 to 5.0 per cent range.
The bank described the July rate cut as pre-emptive, given strong domestic economic conditions.
In contrast, OCBC Bank anticipates another 25-basis-point reduction in either September or November, citing manageable inflation despite subsidy adjustments.
The bank noted that even if RON95 fuel subsidies are rationalised in October 2025, inflation would likely stay at a benign 2.0 per cent.
CIMB Bank, meanwhile, said future rate cuts would depend on economic data, particularly trade and growth indicators.
The bank pointed to Malaysia’s improving labour market, with unemployment at 3.0 per cent, and controlled inflation as factors supporting policy flexibility.
BNM’s Monetary Policy Committee reduced the OPR to 2.75 per cent, adjusting the ceiling and floor rates to 3.0 per cent and 2.5 per cent, respectively.
The central bank framed the move as a pre-emptive step to sustain growth amid moderate inflation. - Bernama
