Ahead of Bank Negara Malaysia's (BNM) interest rate decision on Thursday, the central bank is expected to end the rate hike cycle in the coming quarter.
Citing Kenanga Research's statement in its research note, BNM has acted more modestly in raising the overnight policy rate (OPR) in 2022 while the United States Federal Reserve has acted aggressively in its tightening.
It now predicts another increase of 25 basis points will be implemented at the policy meeting that will take place on January 18 and 19.
In 2022, Malaysia's OPR has increased by 100 basis points or 1.00% to 2.75%.
According to the note, inflationary pressures facing the country may be smaller than regional countries, supported by the recovery in production driven by the manufacturing and service industries.
Following that, he is confident that the central bank will pay attention to the impact of its less aggressive policies on private consumption first, before taking further steps.
The focus is now on the full opening of China which is expected to drive global growth, especially in commodity markets and rebalancing trade.
