Last month we said Malaysia’s pivot was now unmistakeable. Now, with the July cut behind us, Bank Negara Malaysia (BNM) has shifted into a “hold and assess” mode. Inflation is soft, growth is middling and liquidity is looser than it looks on the surface. The Ringgit has narrowed into a tighter band, while enforcement around informal FX is getting sharper. Policy isn’t shouting, but it is acting. Monetary Policy & Liquidity BNM held the OPR at 2.75% in September, after July’s first cut in five years. So what’s the message? The pivot has happened but this is not a rush into an easing cycle. The corridor stays set at 2.50% to 3.00%. The real story sits under the surface. The SRR cut in May (-100bp to 1%) continues to release around MYR 19 billion of liquidity. In June, we flagged this as a stealth stimulus and the first real pivot. July’s OPR cut simply made it official. Anticipate that BNM will hold steady. This will only change should growth slip harder than forecast. Growth, Prices...
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