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Market Highlights
Economic Update
Fri, 07 Nov 2025 08:10 am
BNM MPC Meeting - Stable OPR outlook on easing trade concerns

• BNM maintained the OPR at 2.75% in its November MPC meeting, in line with expectations.
• The policy tone turned slightly more upbeat on the economic and tariff outlook, while projecting inflation to stay moderate into 2026.
• BNM’s policy path will hinge on tariff developments, with semiconductor-related tariffs remaining the key risk. That said, easing trade tensions support a stable OPR outlook.
• We expect BNM to keep the OPR unchanged at 2.75% through 2026, barring renewed trade shocks.

Economic Update
Thu, 30 Oct 2025 07:39 am
US FOMC Meeting - Fed cuts 25 bps, ends QT in December

The Fed cut the policy rate by 25 bps to 3.75–4.00%, with Governor Stephen Miran dissenting in favour of a larger 50-bp cut, while Kansas City Fed President Jeffrey Schmid voted for no change.

Chair Powell stressed that a December rate cut is not conclusive, highlighting diverging views within the Committee on inflation and employment risks.

The Fed will conclude the reduction of its securities holdings on 1 December, citing tighter money market liquidity conditions, effectively marking an end to QT.

We expect the Fed to deliver another 25-bp cut in December, while maintaining a general easing bias into 2026.

UST yields should retain a mild downward bias, lending support to the ringgit. Given trade uncertainties, we maintain our projection that USDMYR will hover around 4.20 this year before strengthening modestly to 4.15 in 2026.

Economic Update
Thu, 23 Oct 2025 07:28 am
Malaysia Inflation Rate - Modest inflation supports key reforms

Headline inflation edged up to +1.5% YoY in September (Aug: +1.3%), slightly above consensus, partly driven by water tariff adjustments.

Core inflation rose to +2.1% YoY (Aug: +2.0%), signalling resilient domestic demand. Government’s cash aid has helped support household consumption momentum.

Implementation of reform measures such as water tariff adjustments in a low-inflation environment is timely, helping to contain near-term price risks.  

We expect headline inflation to stay steady in the remaining months, as lower fuel prices under the Budi95 scheme offset modest cost pass-through from other measures.

We maintain our 2025 and 2026 inflation forecasts at +1.4% YoY and +2.0% YoY, respectively. The projected uptick in 2026 reflects continued passthrough from fiscal and cost-reform measures, including SST expansion, minimum wage adjustments, insurance premium hikes, and utilities tariff rationalisation, alongside firm domestic demand.

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