Materialization of tariff risks could prompt BNM to reassess risks and adjust its policy path ahead

Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) unchanged at 2.75% during its September Monetary Policy Committee (MPC) meeting, striking a balanced tone as it weighed global uncertainties and domestic resilience. The central bank highlighted that while inflation is expected to stay moderate into 2026, downside risks from external demand and upside risks from potential tariff actions could reshape its policy outlook. Analysts note that BNM’s neutral stance signals no urgency to adjust rates, but growing trade-related risks may compel policymakers to reconsider their path in the months ahead.

Tariff risks

“BNM held the OPR at 2.75% in its September MPC meeting, in line with expectations. Policy tone turned more balanced, noting both downside risks and upside potentials in the global landscape, while projecting inflation to stay moderate into 2026.

“We believe the materialization of tariff risks could prompt BNM to reassess risks and adjust its policy path ahead. We share BNM’s view that domestic demand remains resilient for now, while remaining mindful that sector-specific tariffs could trigger broader growth spillovers.

“We see scope for a 25-bp cut in 2026 if tariffs intensify, though BNM’s neutral tone suggests no urgency to ease. We keep our OPR forecast at 2.75% through 2025 and 2026.”

Business News

Staff Writer

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