Economists expect Bank Negara Malaysia to hold OPR at 2.75% through 2026
Bank Negara Malaysia kept its overnight policy rate (OPR) at 2.75% on Thursday, and economists now expect it to remain there for the rest of 2026 before a gradual normalisation begins next year.
Source: The Edge Malaysia · July 23, 2026 at 1:01 AM · AI-assisted report
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KUALA LUMPUR, 23 JULY 2026 —
Bank Negara Malaysia kept its overnight policy rate (OPR) at 2.75% on Thursday, and economists now expect it to remain there for the rest of 2026 before a gradual normalisation begins next year.
Market Impact
The central bank said its current stance remains “appropriate and consistent with the outlook of continued price stability and sustainable economic growth,” forecasting 2026 GDP growth of 4%-5% and inflation of 1.5%-2.5%.
The OPR has been at 2.75% since July 2025. The economy expanded 5.4% year-on-year in the first quarter of 2026, even as war in the Middle East continued.
OCBC Bank expects the OPR to stay at 2.75% through 2026 and then deliver a 25-basis-point increase to 3% in early 2027. BIMB Securities also anticipates a normalisation start in 2027, with the benchmark rate reaching 3% that year and 3.25% in 2028.
“With inflation manageable, labour conditions firm and exports supported by the AI and semiconductor upcycle, BNM can afford to normalise policy gradually while keeping growth on track,” BIMB Securities said in a note.
MBSB Research raised its 2026 GDP growth forecast to 4.5% from 4.2%, citing stronger-than-expected first-half momentum driven by exports and steady domestic demand. The firm sees signs of easing external risks and believes the worst-case scenario in the Middle East conflict has passed.
Headline inflation is projected to rise to 2% in 2026 from 1.4% in 2025, though MBSB warned the full cost impact has yet to fully materialise. Consumer prices climbed 2% year-on-year in May, the highest since July 2024.
ANZ Research diverged from the consensus by forecasting a 25-basis-point hike in the second half of 2026.
“Renewed tensions in the Middle East still cloud the outlook and justify policy patience,” ANZ said. “But if growth stays resilient and inflation firms gradually, as we expect, the case for keeping last year’s precautionary cut disappears.”
Related: Bank Negara Malaysia (BNM) · KUALA LUMPUR