KUALA LUMPUR: Public Investment Bank Bhd (PublicInvest) said a neutral tone in the latest Monetary Policy Statement (MPS), and the depth of ongoing risks strengthens its view that the overnight policy rate (OPR) will remain at 3.0 per cent for the rest of 2024.
The firm said that Bank Negara Malaysia's (BNM) consistent forward guidance since September 2023 indicates a level of comfort with the current monetary settings, suggesting no immediate need for policy adjustments.
It expects BNM to maintain the OPR at 3.0 per cent this year to sustain economic growth amid price stability.
"Additionally, government initiatives are anticipated to continue supporting the ringgit towards year-end.
"We forecast the ringgit to range within the 4.55–4.55 range by year-end, considering the US Federal Reserve's (Fed) widely anticipated rate cut cycle commencing in September, despite a slower pace of US Federal Funds Rate (FFR) cuts than we initially expected earlier this year," it said.
Hong Leong Investment Bank Bhd (HLIB) also maintains its expectation for BNM to keep the OPR unchanged at 3.0 per cent for 2024.
According to the Monetary Policy Committee (MPC), the current OPR level and policy stance remain supportive of the economy and are consistent with its current assessment of inflation and growth prospects.
While growth is anticipated to improve further, HLIB said BNM expects it to remain within its forecast range of 4-5 per cent year on year (YoY).
In addition, the firm said that amid supply-side inflationary measures, demand-pull price pressures are anticipated to remain steady.
"Hence, we maintain our forecast for BNM to keep the OPR at 3.0 per cent for the rest of the year," it added.