Goldman Sachs: Malaysia may delay raising its policy benchmark rate until the first quarter of 2027

Goldman Sachs said that despite Bank Negara Malaysia's recent hawkish signal, the central bank is unlikely to tighten monetary policy at its November meeting, given uneven economic recovery and moderate inflation. The Goldman Sachs economist team led by Chris Bo said: "The relevant remarks are mainly intended to preserve policy flexibility, rather than suggesting a rate hike at the next meeting. Once strong economic growth eventually triggers broad-based inflationary pressure, Bank Negara Malaysia can respond accordingly." Both headline inflation and core inflation remain below their long-term averages, giving Bank Negara Malaysia room to wait and see. It is expected to raise the benchmark interest rate by 25 basis points to 3% at its meeting in January next year; this forecast revises Goldman Sachs' previous long-held view that rates would remain unchanged.