Institution: Bank Negara Malaysia may keep interest rates unchanged in 2026.

The BMI report states that due to resilient domestic demand supporting economic growth, and inflation being kept under control, the Central Bank of Malaysia may keep the policy rate unchanged at 2.75% throughout 2026. The institution predicts that economic growth in 2026 will slow down from an estimated 4.6% in 2025 to around 4.1%. They point out that due to wage increases and cash handouts, the current forecast for average inflation rate in 2026 is 1.9%, slightly higher than the previous expectation of 1.7%, but still manageable. BMI currently predicts that the terminal rate of the Federal Reserve will be lowered from the previous forecast of 3.50% to 3.25%. They mention that in the context of the Central Bank of Malaysia staying put, yield differentials should move in favor of the Ringgit. BMI currently predicts that by the end of 2026, the US Dollar to Malaysian Ringgit exchange rate will reach 4.0, compared to the previous forecast of 4.10.