HLB Business Matters: Domestic Demand Expected to Remain Positive as US Federal Reserve Resumes Interest Rate Cuts
HLB Business Matters: Domestic Demand Expected to Remain Positive as US Federal Reserve Resumes Interest Rate Cuts
KUALA LUMPUR, 23 SEPTEMBER 2025 - Malaysia’s domestic demand is expected to remain firm as the US Federal Reserve recently cut interest rates by 25 basis points, signaling a shift in the global financial landscape that is poised to unlock new opportunities for local businesses and further stimulate the SME ecosystem.
This was the central message delivered by experts at a recent webinar held a day after the Fed’s announcement, hosted by Hong Leong Bank (“HLB” or the “Bank”) under its HLB Business Matters customer engagement platform. The webinar, titled “Unpacking the Fed’s Move: A Post-FOMC Market Analysis”, is part of the Bank’s commitment to provide customers with value-added advisory services that go beyond traditional banking solutions.
The Bank emphasized that Malaysia’s resilient domestic demand will continue to sustain growth despite global headwinds, and Bank Negara Malaysia’s (“BNM”) official growth forecast of 4.0-4.8% is achievable, barring unforeseen shocks. The decision by the Federal Open Market Committee (“FOMC”) to cut rates for the first time after a nine-month hiatus, and expectations for further cuts ahead, are anticipated to further narrow interest rate differentials. BNM is expected to maintain the Overnight Policy Rate (“OPR”) at the current level of 2.75%, providing continued support for the Malaysian Ringgit (“MYR”).
This points to a potentially more stable and even strengthening Malaysian Ringgit against the US Dollar, which could lead to more favorable exchange rates, potentially reducing import costs and offering hedging opportunities for businesses involved in international trade.
“This is a pivotal moment for SMEs,” commented Yow Kuan Tuck, HLB’s Managing Director of Business & Corporate Banking. “As a Bank, we are committed to helping our customers leverage market trends and business opportunities, providing tailored advisory and solutions that ensure our customers are well-positioned to capitalize on industry moves and potential business expansion opportunities. With an expected influx of foreign direct investments, we are ready to assist our business customers with trade and financial advisory, cross-border transactions, and import-export solutions, becoming a value-adding partner for our customers as we look beyond the headlines and truly thrive in a new era of growth.”