Malaysian Ringgit: BNM hawkish tilt supports MYR – Commerzbank
Commerzbank highlights that Bank Negara Malaysia kept the OPR at 2.75% but shifted to a more hawkish bias, removing language that policy is "appropriate" and signalling vigilance on cost pressures.
The Malaysian Ringgit (MYR) is expected to strengthen slightly in the coming months as the Bank Negara Malaysia (BNM) adopts a more hawkish stance, according to Commerzbank. The central bank maintained its Overnight Policy Rate (OPR) at 2.75% but shifted from describing its monetary policy stance as "appropriate" to "consistent with price stability and sustainable growth."
This change signals a tightening bias, as BNM prepared markets for a potential interest rate hike later this year or early 2027. Despite low inflation and cushioned energy prices, BNM remains vigilant about cost pressures and domestic demand conditions. Strong economic growth, supported by export demand and stable labor market conditions, has led BNM to expect around 5% GDP growth in 2026, near the upper end of its previous forecast range.
Inflation remains relatively low, averaging 1.8% and 2.0% for headline and core inflation respectively, with BNM projecting inflation to stay within the 1.5-2.5% and 1.8-2.3% range for this year. Currently trading at 4.0420, the MYR could see support from the hawkish tone of BNM and the strong growth backdrop, with a potential range of 4.00-4.07.
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