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Maybank sees hawkish pivots among ASEAN central banks following US Fed rate hike

20/06/2022 03:29 PM

KUALA LUMPUR, June 20 (Bernama) -- Maybank Investment Bank Bhd (Maybank IB) saw “hawkish” pivots among ASEAN central banks after the United States (US) Federal Reserve (Fed) front-loading its interest rate hikes and sent fed funds rate (FFR) to higher peak level than the last interest rate hikes cycle’s peak of 2.50 per cent.

In a research note today, chief analyst Suhaimi Ilias said Fed chairman Jerome Powell also indicated a 50 to 75 basis points rate hike for the next  Federal Open Market Committee (FOMC) meeting on July 26 to 27.

He said the Bank Negara Malaysia (BNM) is expected to increase the overnight policy rate (OPR) by 25 basis points in the next Monetary Policy Committee (MPC) meeting from July 5 to 6 after the 25 basis points hike at the May 10 to 11 meeting.

The analyst said there is also the prospect of another 25 basis points hike by the end-2022 to raise the OPR to 2.50 per cent versus the previous view of another 25 basis points hike later in the second half of 2022 to 2.25 per cent.

“We maintain our forecast of OPR reaching three per cent in 2023,” he said.

He said the Bangko Sentral ng Pilipinas (BSP) also signalled interest rate hikes this month and August 2022, following the 25-basis-point increase to 2.25 per cent last month, and going “data-dependent” afterwards.

“Our BSP’s policy interest rate forecast currently is 2.75 per cent this year and four per cent next year with upside risk of ‘front-loading’ this year given the above-mentioned signal by BSP on its near-term policy rate trajectory,” it said. 

Meanwhile, he said Maybank IB revised forecast on Bank of Thailand’s (BoT) benchmark interest rate, expecting a 50-basis-point hike to one per cent by end-2022 and another 50-basis-point increase to 1.50 per cent in 2023 versus 25-basis-point hike this year and 50-basis-point hike next year previously.


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