Kuala lumpur: OCBC expects a 25 basis point (bp) rate cut from Bank Negara Malaysia (BNM) next year, likely in the second quarter of 2026 (2Q 2026).

According to BERNAMA News Agency, in its Global Economic Outlook 1H 2026 report today, OCBC stated that its forecast for softer economic growth and limited room for broad-based fiscal support suggests that monetary policy still has wiggle room, particularly since inflationary pressures have been largely well managed.

‘We expect monetary policy to remain nimble. We are comfortable with our forecast for another 25 bp rate cut from BNM next year, likely in 2Q 2026,’ OCBC added. The report emphasized that the government’s subsidy rationalisation efforts have been well executed, noting that while the prices of targeted items rose in 2025, overall headline and core inflation remained in check.

OCBC also highlighted that the risk to their forecast for another 25 bp rate cut is contingent on the gross domestic product growth not slowing as anticipated, which could allow the central bank to maintain its current stance longer into 2026. Currently, BNM’s overnight policy rate stands at 2.75 per cent.