PETALING JAYA: Bank Negara Malaysia (BNM) is expected to uphold its current overnight policy rate (OPR) of 3% for the next six to 12 months, despite upside risk to prices, said Kenanga Research.
In a statement, the research house said inflation rates are also expected to remain stable, staying below 3% in 2024 and 2025.
It said the optimistic forecast is based on the potential upward pressures on inflation due to the prospect of subsidy rationalisation in the second half of 2024 (H2 2024) and the recent wage hike for civil servants.
“Concurrently, there may be strong potential for the ringgit/US dollar to strengthen below the RM4.50 level by the end of 2024.
“This is supported by expectations that BNM will maintain its current stance for the remainder of the year and the government’s commitment to fiscal discipline,” said Kenanga.