Standard Chartered Bank in its Global Research (November 2, 2022) expects BNM to hike the policy rate by 25bps in November.
BNM may turn more data-dependent going forward Bank Negara Malaysia (BNM) is scheduled to announce its monetary policy decision on 3 November. We expect it to raise the overnight policy rate (OPR) by 25bps to 2.75%, the fourth consecutive 25bps hike since May.
In its previous policy statement, BNM continued to assess its stance as “accommodative and supportive” of economic growth. We read this as meaning that BNM is still looking to remove further accommodation. However, the central bank also noted that the committee is not on any “pre-set course”; this suggests that a pause may be coming soon, in our view.
BNM may sound even more neutral at the upcoming meeting, given that it will have delivered 100bps of rate hikes (assuming a 25bps move in November). However, given the strong growth recovery and simmering (albeit not yet threatening) inflation, we do not expect BNM to send a clear signal that it will stop after the November hike, and it may turn more data-dependent going forward.
