Kuala lumpur: Public Investment Bank Bhd (Public IB) anticipates that Bank Negara Malaysia (BNM) will maintain interest rates at their current level through the end of 2025, following a recent reduction in the overnight policy rate (OPR).

According to BERNAMA News Agency, BNM recently lowered the OPR by 25 basis points to 2.75% during its fourth Monetary Policy Committee (MPC) meeting of the year, marking the first rate reduction since July 2020. Despite this cut, Public IB highlighted that the July MPC statement does not suggest a sequence of rate cuts.

In its research note, Public IB indicated that with real policy rates remaining positive and inflation expectations stable, the current move seems to be an early buffer rather than the beginning of a full easing cycle. The bank assessed BNM’s policy stance as conditionally accommodative, with further adjustments dependent on significant global or domestic economic downturns. With two policy meetings left in the year (September and November), BNM has room to maneuver but is expected to adopt a cautious, data-driven strategy given uncertainties, particularly related to the United States’ trade policy and global demand.

Similarly, Maybank Investment Bank Bhd has forecasted no additional rate cuts this year, maintaining its earnings outlook for Malaysian banks. Maybank noted that they had already accounted for one rate cut in the latter half of 2025, adjusting their net interest margins (NIMs) by two to three basis points on average. Consequently, their earnings forecasts remain unchanged, with an expected aggregate NIM compression of two basis points to an average of 2.06% in 2025 and stable NIMs in 2026, retaining a ‘neutral’ stance on the banking sector.

Conversely, CIMB Investment Bank Bhd stated that any further OPR cuts beyond July would be data-dependent, particularly concerning growth and trade dynamics. CIMB observed that the domestic economy is bolstered by a robust labor market, with the unemployment rate at three percent, indicating strong underlying conditions. Inflation remains controlled, with headline inflation projected at 2.2%, and the ringgit has appreciated by 5.2% year-to-date, mitigating imported cost pressures. These factors indicate sufficient policy flexibility should growth risks increase in the second half of 2025.