Bank Negara to keep OPR at 2.75pct in November meeting: Apex Securities

KUALA LUMPUR: Apex Securities Bhd anticipates Bank Negara Malaysia will maintain the overnight policy rate (OPR) at 2.75 per cent during its upcoming Monetary Policy Committee meeting in November. The firm believes that the current low inflation outlook negates the need for immediate monetary policy adjustments, hence their stance on keeping the OPR unchanged at 2.75 per cent.

Looking further ahead, if the domestic economic conditions stay positive, inflation remains stable, and major advanced economies continue to tighten their monetary policies, Apex Securities predicts the central bank will raise the policy rate by 25 basis points (bps) by 2027, ultimately bringing the OPR to three per cent. The research note from Apex Securities also reaffirms its inflation forecasts for 2026 and 2027 at two per cent year-on-year.

However, the firm notes that near-term inflation risks lean slightly towards the upside, primarily due to cost-related pressures. Despite these risks, inflation has largely stayed below two per cent even in the face of the West Asia conflict, thanks to the adjustments made by the government's subsidy policies. The government's recent restoration of the Budi95 monthly quota to 300 litres and the increase in the Budi diesel quota to 400 litres, effective from September, have helped keep price pressures in check.

Additionally, the household electricity subsidy threshold has been extended to 800 kilowatt-hours (kWh) per month from 600 kWh until December 31, 2026. These measures are expected to maintain household purchasing power and support domestic spending, according to Apex Securities.