A cut could spur borrowing and investment, while signaling to investors that BNM is concerned about the growth outlook amid the global tariff uncertainty.
Investors increasingly expect Malaysia, Southeast Asia's last holdout against interest rate cuts, to give in to mounting economic pressure from the global trade war.
Ringgit swaps are pricing 30 basis points of easing by Bank Negara Malaysia (BNM) over the next six months, double the expectations from just a month ago. A recent auction of a three-year government bond - the most sensitive benchmark to rate expectations - received a bid-to-cover of 3.18 times, the highest since August 2024 for short-to-mid dated notes.
