Kuala Lumpur:Bank Negara Malaysia (BNM) is anticipated to maintain the overnight policy rate (OPR) at 2.75 percent during the upcoming Monetary Policy Committee (MPC) meeting scheduled for this Thursday, as stated by Juwai IQI.

According to BERNAMA News Agency, Juwai IQI co-founder and group chief executive officer Kashif Ansari indicated that the central bank is expected to increase the rate by 25 basis points to 3.00 percent in the first quarter of 2027. This prediction is based on stronger-than-expected economic growth since the last MPC meeting, coupled with lower inflation rates.

Kashif noted that BNM Governor Datuk Seri Abdul Rasheed Ghaffour had earlier suggested the possibility of a rate increase, citing that the central bank now has more flexibility to adjust rates if inflationary pressures intensify. He pointed out that the current rate aligns with the observed levels of inflation and economic growth.

The gross domestic product (GDP) is projected to rise by approximately 5.0 percent this year, with government expectations ranging from 4.2 percent to 5.2 percent for next year. Additionally, inflation rates could see an uptick in 2027 due to anticipated increases in energy, food, and economic input costs.

Kashif explained that inflation forecasts for the coming year suggest a potential rise to as high as 2.8 percent, a significant increase that could prompt a policy rate hike by the central bank. Consequently, financial traders are currently pricing in a 76 percent likelihood of a rate hike within the next six months, in light of the government's forecast of rising inflation in early 2027.