Public Investment Bank Bhd expects another 25 basis points rate hike to 3.0 per cent in the second half of 2023, but this hinges on domestic policy measures such as the possible introduction of a targeted fuel subsidy and price controls as well as global commodity price developments.
After raising its OPR by 100bps at four consecutive meetings, BNM guided that any future"further normalisation to the degree of monetary policy accommodation would be informed by the evolving conditions and their implications to the domestic inflation and growth outlook”. CGS-CIMB Research noted that a big question now is the central bank’s next move as the central bank highlighted that it is"not quite done” with raising interest rates and that the decision to pause the hike was to"assess the impact of the cumulative past OPR adjustments”.
"Budget 2023 may not give much clarity in terms of decisions over new taxes and subsidies as the government may hold off negative announcements until the state elections to be held latest by June 2023,” said CGS-CIMB Research.