KUALA LUMPUR, March 8 — Bank Negara Malaysia will raise the overnight policy rate again in 2018, according to BMI Research one day after the central bank kept the key rate unchanged.

The Fitch Group unit insisted that inflationary pressure would compel the central bank to do so, after its previous prediction of a second rate hike fell through.

"We maintain our expectations for the central bank to hike interest rates by 25bps in 2018 as it seeks to pre-empt the rise in inflation, while a strong growth trajectory will enable it to tighten policy without fears of undermining growth.

"In addition, the global shift towards interest rate normalisation will also prompt BNM to act to ensure financial stability.”

BNM yesterday maintained the OPR at 3.25 per cent, saying its Monetary Policy Committee (MPC) concluded that the "accommodativeness” was suited to current economic and market conditions.

The central bank raised the interest rate by 25bp in January, the first since 2014.

BNM also projected that inflation would ease in 2018 based on, among others, the ringgit's recovery against the US dollar.