UOB Global Economics & Markets Research reports that Malaysian inflation remained stable in January, slightly below its own forecast and in line with consensus. Despite solid Q4 2025 GDP, price pressures are considered contained, reducing the urgency for policy changes. Accordingly, UOB maintains its position that Bank Negara Malaysia will maintain the overnight rate at 2.75% throughout 2026.

Limited inflation supports a stable policy stance

“Malaysia headline inflation remained stable at 1.6% y/y in January (December: 1.6%), in line with the Bloomberg consensus, but slightly lower than our estimate (1.7%).”

“In our view, despite strong GDP in Q4 2025, inflation remains subdued, providing little impetus for Bank Negara Malaysia (BNM) to adjust its monetary policy stance in the near future.”

“We maintain our view that the overnight rate (OPR) will be maintained at 2.75% until 2026.”

(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor.)