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BNM May Cut OPR if Economy Slows, Says HLIB

A busy street scene in Malaysia

April 9, 2025 – Kuala Lumpur: Bank Negara Malaysia (BNM) could lower its Overnight Policy Rate (OPR) by 25 basis points if Malaysia’s economy shows signs of slowing in the near future, according to a report by Hong Leong Investment Bank (HLIB).

The analysis suggests that moderate inflation and rising global economic pressures might prompt BNM to ease monetary policy to stimulate growth.

However, HLIB emphasized that BNM is unlikely to act immediately, preferring a cautious “wait-and-see” stance until clearer evidence of economic weakness emerges.

OPR CUT

The report points to external challenges, including a looming 24% tariff on Malaysian exports to the United States, a vital market for the country’s electrical and electronics (E&E) sector, which makes up nearly 70% of U.S.-bound exports. Some firms have ramped up shipments ahead of the tariff’s start date on April 9, 2025, to soften the blow.

HLIB also proposed that boosting U.S. imports could help offset the trade imbalance caused by the tariffs. For now, BNM appears set to monitor the situation closely, with no rate cuts expected as of early April unless economic conditions deteriorate further.

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