Subdued Inflation Likely To Keep BNM’s OPR At 2.75 Pct In 2026 -- HLIB

KUALA LUMPUR, Jan 21 (Bernama) -- Bank Negara Malaysia (BNM) is expected to maintain the overnight policy rate (OPR) at 2.75 per cent throughout 2026, supported by subdued inflation in 2025 and steady economic growth.

Citing the latest consumer price index (CPI) data released by the Department of Statistics Malaysia (DoSM) yesterday, Hong Leong Investment Bank Bhd (HLIB) said full-year inflation for 2025 settled at 1.4 per cent, down from 1.8 per cent in 2024, signalling that the post-pandemic disinflationary trend remains intact.

Moving into 2026, HLIB anticipated the CPI, a key gauge of inflation in Malaysia, would trend slightly higher to 1.7 per cent, driven by the low base effect, domestic policy adjustments, and communication-related inflation.

"Nevertheless, the upward trajectory is anticipated to be mild due to lower RON95 prices, a benign global commodity environment, coupled with a strong ringgit," it said in a note today.

According to DoSM data, headline inflation picked up 1.6 per cent year-on-year (y-o-y) in December 2025, from 1.4 per cent in November 2025, exceeding the median consensus estimate of 1.4 per cent.

"Inflation was driven by higher inflation in alcoholic beverages and tobacco, housing, utilities and other fuels, information and communication, as well as personal care," it said.

Meanwhile, core inflation ticked up to 2.3 per cent y-o-y in December 2025, from 2.2 per cent in the previous month, it added.

-- BERNAMA