Bank Negara Malaysia likely to keep OPR at 2.75%, but may raise rates later this year, says Juwai IQI.
KUALA LUMPUR: Bank Negara Malaysia (BNM) will likely leave the Overnight Policy Rate (OPR) unchanged at 2.75% at its Monetary Policy Committee (MPC) meeting on Thursday, but may have to raise rates later this year, said Juwai IQI co-founder and group chief executive officer Kashif Ansari.
“What’s most notable this time is that the MPC actually has to consider evidence that it might have to raise rates later in the year since BNM hasn’t raised it since March 2023,” he said.
In a statement today, Kashif also noted that the advance first-quarter gross domestic product growth forecast of 5.3% showed that the economy is resilient despite the global situation.
“Inflation is also up along with growth, although still moderate. BNM also raised its forecast, saying that inflation could reach 2.5% in 2026.
“In short, there is a case for predicting one rate increase later in the year, but that will depend on how the economy and inflation perform between now and then,” he said.
He also said that factors that could shake up BNM’s plans include high oil prices, which would likely push up inflation.
“New tariffs from United States President Trump could also hit Malaysia’s exports. These unpredictable future events won’t change the MPC’s decision at their meeting on May 7.”
On the property sector, Kashif said that the unchanged OPR rate supports stable lending rates, keeping mortgage payments predictable for homeowners and offering clarity for new buyers.
“The current interest rate environment has been good for residential property. The most popular homes are those priced between RM300,000 and RM600,000 in suburban Kuala Lumpur, Penang mainland, and Johor.
“Johor continues to deserve special attention. House prices there rose 6.9% last year, more than in any other state, and the cross-border and infrastructure investment suggests that demand there will keep growing,” he said.
