Kuala lumpur: Bank Negara Malaysia's (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent today reinforced expectations that the central bank will likely hold the rate throughout 2026, although investment banks and research houses caution that prolonged geopolitical tensions and higher oil prices could still alter the inflation outlook.

According to BERNAMA News Agency, HSBC Global Research noted a subtle but notable change in BNM's statement by describing the monetary policy stance as 'consistent' with the current outlook instead of 'supportive', maintaining that the central bank would likely keep rates unchanged through 2026. HSBC senior ASEAN economist Yun Liu highlighted BNM's shift in inflation language, expecting inflation 'to edge higher' rather than 'to remain moderate', reflecting emerging concerns over domestic cost pressures from elevated global commodity prices.

RHB Investment Bank Bhd stated that monetary policy would remain data-dependent, guided mainly by growth prospects and inflation trends. It emphasized that robust economic fundamentals and manageable inflation continued to support a broadly stable policy stance. However, escalating geopolitical tensions could push global energy prices higher, and a 25-basis-point rate hike could not be ruled out if inflation exceeds BNM's official forecast range of 1.5 per cent to 2.5 per cent and remains persistent.

RHB maintained its 2026 gross domestic product (GDP) growth forecast at 4.7 per cent but estimated that a sustained rise in oil prices to US$140 per barrel could shave between 0.5 and one percentage point off Malaysia's growth outlook. Meanwhile, CIMB Treasury and Markets Research indicated that BNM's latest statement acknowledged energy price spikes and supply chain disruptions from the West Asia conflict, which are beginning to weigh on global growth momentum.

CIMB still viewed current inflation pressures as largely supply-driven and transitory, reinforcing expectations for an extended OPR hold rather than pre-emptive tightening. It also noted Malaysia's modest direct trade exposure to Gulf Cooperation Council countries, Iran, and Iraq at around 1.5 to 2.0 per cent of total exports, suggesting the broader impact would mainly come from commodity prices and global demand trends rather than direct trade disruptions.

CIMB highlighted that Malaysia's electrical and electronics exports continued to benefit from the ongoing artificial intelligence-driven semiconductor upcycle, although risks remained from supply shortages and potential United States tariff measures on semiconductors. MBSB Investment Bank Bhd retained its expectation for an extended OPR pause this year, citing resilient domestic growth, healthy labour market conditions, continued investment activity, and sustained demand for electric and electronics exports.

However, MBSB warned that prolonged geopolitical conflicts could keep global energy prices elevated, potentially reinforcing a 'higher-for-longer' inflationary outlook for the remainder of the year. It emphasized that government policy measures, particularly fuel subsidies and targeted interventions, will be crucial in containing potential inflationary pressures.

BNM kept the OPR unchanged at 2.75 per cent for the sixth consecutive Monetary Policy Committee meeting since the 25-basis-point cut in July 2025.