Bank Negara Malaysia (BNM) is expected to adopt two rate hikes of 25 basis points each in 20108, with the first one in January 2018, according to a recent report from ANZ Research.
The downside surprise to October headline inflation was mainly due to a sharp sequential decline in food prices. However, core inflation remains steady suggesting that strong domestic demand is percolating through prices.
"We believe that the current growth-inflation mix makes a strong case for policy tightening," the report added.
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