CGS CIMB expects the headline inflation to decelerate further for the rest of the year, as the full movement control order (MCO) will likely keep the economy operating below its potential for an extended period of time, warranting an accommodative monetary policy.

Reiterating its annual inflation forecast for 2021 at 3.1 percent year-on-year (y-o-y), the research firm also expects Bank Negara Malaysia (BNM) to maintain the overnight policy rate (OPR) at 1.75 per cent for the second half of this year.

"With base effects peaking for headline inflation in April, we expect...