KUALA LUMPUR, May 27 — AmBank Research maintains its full-year inflation target at 1 per cent and believes Bank Negara Malaysia (BNM) would keep its rates unchanged after instituting one cut in early May.
In a research note, it said the underlying inflation could stay fairly muted in the near term underpinned by softening domestic sentiments, added with volatile global crude oil prices.
“Looking forward, we expect an uptick in inflation print owing to a low base effect in view of the three-month tax holiday in 2018, as well as a weaker ringgit against the US dollar, which recorded a year-to-date loss of 1.3 per cent to the 4.19 levels,” it added.
AmBank Research said headline inflation read at 0.2 per cent year-on-year (y/y) in April, unchanged from March but missed market expectations of 0.4 per cent.
“However, inflationary pressure still remained in the negative region when averaged for the first four months at -0.2 per cent, while the core inflation in April grew at the same pace as in March, at 0.5 per cent y/y,” the research house noted. — Bernama
