Bank Negara's 2025 rate cut could be reversed in 2027
KUALA LUMPUR: Bank Negara Malaysia's pre-emptive interest rate cut last year could be reversed as early as the first half of 2027 (1H27) as Malaysia's economy continues to strengthen, analysts said.
KUALA LUMPUR: Malaysia's central bank, Bank Negara, may reverse its pre-emptive rate cut as early as the first half of 2027, according to analysts. The central bank reduced the overnight policy rate (OPR) by 25 basis points (bps) to 2.75% in July 2025, citing external uncertainties. At its latest Monetary Policy Committee (MPC) meeting, Bank Negara kept the OPR at 2.75%, but dropped the word "appropriate" from its statement, suggesting a potential recalibration.
Hong Leong Investment Bank Bhd interpreted this shift as a signal for an eventual policy change, though not in the near future. CIMB Securities and Maybank Investment Bank Bhd both expect a 25bps hike to three percent in the first half of 2027, contingent on strong growth and rising inflation.
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