Kuala lumpur: Bank Negara Malaysia (BNM) is anticipated to maintain its Overnight Policy Rate (OPR) at 2.75 percent for the year 2025.

According to BERNAMA News Agency, a unit of Fitch Solutions, the recent 25 basis points rate cut is expected to be the final adjustment for the current year.

In a note released today, BMI stated that although the rate cut was implemented earlier than anticipated, the organization believes it marks the end of the current rate-cutting cycle, projecting the OPR to remain at 2.75 percent by year-end.

BMI further suggests that the banking sector should have reduced concerns about inflation at present. It highlighted that headline inflation eased to 1.2 percent in May from 1.4 percent in April year-on-year, marking the twelfth consecutive month it stayed below the 10-year average of 2.0 percent.

BMI cautions that the RON 95 fuel subsidy rationalisation plan could increase price pressures and potentially mislead the central bank if policy loosens excessively. The plan is presumed to be implemented in the fourth quarter of 2025 at the earliest, and BMI notes that the targeted aspect of this program might limit its impact on headline inflation.

Additionally, BMI expresses a cautious outlook on the trade negotiation outcomes amid recent developments. The absence of discernible progress on trade negotiations has led to US President Donald Trump threatening to impose a 10 percent tariff on countries endorsing the ‘anti-American’ policies of the BRICS group. This poses negative implications for Malaysia, given its status as a partner country.