Goldman Sachs Sees Malaysia Rate Hike Delayed to January 2027

Goldman Sachs said Bank Negara Malaysia is unlikely to tighten monetary policy at its November meeting, despite recent hawkish signals. According to Sina Finance, the bank's economists, led by Chris Poh, said the remarks were mainly intended to preserve policy flexibility rather than signal a rate hike at the next meeting. Goldman Sachs said it now expects Bank Negara Malaysia to raise its benchmark rate by 25 basis points to 3% at the January meeting next year, revising an earlier view that rates would stay unchanged for an extended period. The firm said overall inflation and core inflation remain below long-term averages, while GDP growth has been stronger than expected but the economy has not overheated. Goldman Sachs also said technology-sector growth was 11%, while growth in the rest of the goods-producing sector was only 2%. It said the recovery in economic activity has not yet fed through to wage and price pressures, and that renewed external uncertainty and continued weakness outside the technology sector support keeping rates unchanged for longer. The analysts added that if the next two consumer price index and producer price index releases show stronger cost pass-through to manufactured goods and consumer prices, they may bring forward the rate-hike forecast to November.