KUALA LUMPUR, July 2 — RHB Research Institute expects Malaysia’s money supply (M3) to grow to 5.0 per cent this year as compared to the 4.7 per cent recorded in 2017, backed by resilient demand for credit.
In a research note today, it said the higher growth in money supply, however, is unlikely to result in any demand-pull price pressure.
“We envisage inflation to moderate to 1.9 per cent in 2018, from 3.7 per cent in 2017, while core inflation should remain manageable.
“Despite lower expected headline inflation, we believe another round of rate hike is still on Bank Negara Malaysia’s (BNM) cards this year, in line with the US Federal Reserve’s (US Fed) rate hike policy, which is expected to be at a quicker pace than previously expected,” it added.
However, RHB Research said there is a risk that the tightening move may be put on hold or delayed, should the country’s economic growth slow more than expected this year. — Bernama
