Kuala lumpur: Maybank Investment Bank Bhd (Maybank IB) anticipates that Bank Negara Malaysia (BNM) will maintain the overnight policy rate (OPR) at 2.75 per cent for the remainder of the year, following a 25 basis points reduction on July 9.
According to BERNAMA News Agency, Maybank IB’s group chief economist, Suhaimi Ilias, indicated that the investment bank perceives BNM’s approach as a ‘one-cut-and-done’ strategy regarding rate adjustments. He emphasized that no further cuts are expected from BNM despite the predicted downward revision to Malaysia’s gross domestic product (GDP) growth by the end of the month. The current official growth forecast ranges between 4.5 to 5.5 per cent, and Suhaimi suggested that BNM’s rate cut impact has been considered in this outlook.
Suhaimi noted that the interest rate cuts are likely to benefit consumer spending, a significant GDP component in ASEAN economies. He pointed out the resilience in private consumption in Malaysia, the Philippines, and Indonesia, along with im
proving retail sales in Vietnam and Singapore. The investment bank has sustained its GDP growth forecast for Malaysia at 4.1 per cent for the year, a decrease from last year’s 5.1 per cent average.
He also addressed global uncertainties, particularly related to US trade policies and rising tariffs, which have led to a slight downward revision from the initial 4.9 per cent GDP forecast. Nonetheless, Malaysia is expected to benefit from strong domestic demand and ongoing investment growth, driven by consumer spending, government policies, and capital investments in sectors like manufacturing and infrastructure.
Maybank IB maintains its positive outlook on private consumption, projecting a 5.3 per cent growth in 2025, supported by household income measures and continued investment momentum. It has also retained its FBM KLCI target at 1,660 for the year, contingent on easing trade tensions and favorable tariff negotiations.
Lim Sue Lin, Maybank IB’s head of equity research, stated that the local benchmark inde
x is expected to range between 1,550-1,600, with potential to reach 1,660 given positive developments. The banking sector, contributing 50 per cent to KLCI earnings, is anticipated to experience some recovery in 2026, potentially influenced by credit cost reductions and macroeconomic stability.
Regarding the ringgit, Maybank’s head of foreign exchange research, Saktiandi Supaat, expressed a mildly bullish outlook, predicting the currency to reach 4.10 against the US dollar by end-2025. This forecast is supported by a weakening US dollar, portfolio inflows, and domestic reforms, despite slow conversion from foreign currency deposits to ringgit. He highlighted that the ringgit remains fundamentally supported by fair valuation and structural policies.