KUALA LUMPUR, Sept 2 — Research firms expect Bank Negara Malaysia (BNM) to maintain its Overnight Policy Rate (OPR) at 3.0 per cent this Thursday.

As that is still below where it was in early 2019, Moody’s Analytics said it expects BNM to leave rates on hold through to 2025.

"Malaysia’s central bank will give an update on its monetary policy settings on Thursday.

"While the New Zealand and Philippine central banks have lowered interest rates in recent weeks, BNM will likely leave its OPR at 3.0 per cent through to 2025,” it said in its Economic Weekly Highlights & Preview note released on Aug 30, 2024.

It further said interest rate hikes in Malaysia were not as aggressive as those elsewhere in the region and the country’s benchmark rate is still lower than it was in early 2019 (3.25 per cent).

"Having been one of the worst performing currencies in Asia last year, the ringgit has been appreciating in recent months.

"BNM will likely want to sustain that trend by keeping interest rates steady,” said Moody’s Analytics.

Echoing the statement, Standard Chartered Global Research maintained its view that BNM will stay on hold for the rest of the year. It noted that risks are biased more towards a rate hike than a cut.

"We will watch for any tweaks to BNM’s inflation outlook,” it said in its Global Research note.

Furthermore, it said BNM is also likely to maintain its view that the ringgit’s moves are driven by external factors.

Concerns about the local currency have eased over the past few meetings amid the ringgit’s outperformance since the end of February.

"BNM’s assessments of the ringgit went from "undervalued” in March to "does not reflect fundamentals” in May, to noting that "it is driven by external factors in July,” it added. — Bernama