KUALA LUMPUR: Malaysia’s central bank will wait until at least July before raising interest rates from a record low as it waits for the economic recovery to take hold, a Reuters poll has found.

       Although inflation climbed above Bank Negara’s 2% to 3% outlook range in November, it is expected to fall back within that range in the coming months, giving the central bank room to hold fire on rate hikes for now.

       The Jan 10-14 poll of 23 economists suggested that Bank Negara will keep its overnight policy rate at 1.75% until the end of June.

       All 23 expect no change on Thursday.

       “Bank Negara will remain accommodative to support growth at least until mid-2022 when we expect the recovery to become self-sustaining,” noted Debalika Sarkar, an economist at ANZ.

       “We expect the first rate hike only in the third quarter of 2022 and this will be more symptomatic of policy normalisation than tightening,”

       That view was in line with median predictions in the poll.

       Economists forecast the central bank would raise its key interest rate to 2% in the third quarter.

       Headline inflation rose to 3.3% in November due to global supply chain disruptions and rising fuel prices, but is expected to stabilise this year and next.

       It has been forecast to cool from 2.5% in 2021 to 2.1% and 2% this year and next. However, supply chains could be further impacted by the Covid-19 pandemic.

       Six of seven respondents who answered an extra question said risks to their inflation outlook were skewed to the upside. — Reuters