Malaysia: BNM to Stay on Hold as Domestic Resilience Cushions Ringgit Weakness

MUFG expects Bank Negara Malaysia (BNM) to keep the OPR at 2.75% through 2026, supported by resilient domestic growth and manageable inflation. While external risks like US yields persist, new FX stabilization measures and strong domestic fundamentals are expected to cushion the ringgit.

Key Takeaways

• 1.Bank Negara Malaysia (BNM) is expected to maintain the OPR at 2.75% throughout 2026 given manageable inflation and resilient growth.
• 2.Domestic fundamentals are supported by a resilient labor market, robust investment in data centers/cloud infrastructure, and a strong trade surplus.
• 3.New FX measures encouraging state-linked firms to repatriate foreign earnings are aimed at smoothing ringgit volatility.

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