KUALA LUMPUR, Nov 2 — Analysts expect Bank Negara Malaysia (BNM) to continue to maintain the overnight policy rate (OPR) at 3.0 per cent in 2024, given that the OPR is already at the normal rate supportive of sustained economic growth in the country.

MIDF Research sees the external environment staying challenging next year amid geopolitical tensions, elevated price levels, and the risk of a global economic slowdown.

"The domestic economic outlook is predicted to stay vigilant and resilient underpinned by steady domestic demand. However, the stabilisation of the core inflation rate and a challenging external environment may influence BNM to keep the OPR at the current level throughout 2024,” it said in a note today.

It said the decision will be subjected to the stability of economic growth, the pace of price increases, and a further improvement in macroeconomic conditions, particularly an encouraging labour market and growing domestic demand.

RHB Research also does not expect to see an interest rate hike in Malaysia next year.

"Our view is driven by a few key factors, including the US dollar-ringgit consolidating towards end-2024 and domestic rates remaining elevated, which narrows the interest differential with developed markets,” it said in a note.

The research house also reckons that the ringgit is likely to strengthen towards a range of 4.50-4.70 against the US dollar by end-2024 (versus 4.80 by end-2023).

"The ringgit may see some consolidation as early as the first quarter of 2024 (1Q 2024) at around 4.60-4.70 per US dollar as the Malaysian macroeconomic backdrop improves into the first half of next year.

"We expect the positive carry on the US dollar to narrow against Asean FX in 2024, which will likely translate into broad Asean foreign exchange strength (including the ringgit) against the greenback,” it said.

In addition, the fiscal consolidation measures and Budget 2024 initiatives announced should also provide some support to the ringgit in 2024, it added. — Bernama