AmBank Research expects BNM to maintain current policy rate in 2018

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KUALA LUMPUR (July 12): AmBank Group Research expects Bank Negara Malaysia (BNM) to maintain the current policy rate in 2018 in a move to support growth while inflation remains lows.

In a note today, AmBank group chief economist and head of research Dr Anthony Dass said despite some noises on a possible rate cut by BNM in the recent MPC meeting, the central bank decided to maintain the Overnight Policy Rate (OPR) at 3.25%, a decision that fell in line with both his and market expectation.

“Although BNM adopted a “neutral” view, we found some level of cautiousness,” he said

Dass said noises on a possible rate cut in the future remains low from our assessment, showing a reading close to 20% only.

“While our focus will be on the next MPC meeting in September, our other emphasis will be on the budget that will be unveiled in November, looking at how the government plans to balance the book with changes on the tax rates and treatment of insolvent Government Guaranteed debt and their growth policies,” he said.