While recent market turmoil may have sparked a rate-hike trend among emerging market central banks, one Asian economy could buck the trend and stay pat for the rest of the year.
Despite the hovering near a four-year low as a result of the ongoing selloff in emerging markets, Bank Negara Malaysia left its overnight policy rate (OPR) unchanged at 3 percent for a 16th straight meeting on Wednesday. The decision stands in stark contrast to Turkey's shocking 425 basis point rate rise, South Africa's 50 basis point increase and India's surprise 25 basis point hike.
(Read more: Investors rebel against rate hikes in South Africa, Turkey)
The general consensus is for Malaysia to hike rates this year, but OCBC Bank has a contrarian call.
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"We see Bank Negara adopting a wait-and-see attitude and a good chance that, for all the rate hike hoopla of late, it might well keep the OPR rate unchanged at 3 percent for the whole of this year," said Wellian Wiranto, economist, treasury research and strategy, global treasury at OCBC.
(Read more: Can Malaysia's shares continue to march higher?)
That view opposes the 25 to 50 basis point increase expected by a raft of analysts due to rising inflationary pressures. Last month, annual headline inflation spiked to a two-year high as the effects of the government's fuel subsidy cut filtered through the economy.
"Inflation is likely to continue to creep up, especially with the electricity tariff hikes that commenced this month. We are forecasting CPI inflation to average 3 percent in 2014, from 2.1 percent in 2013, wrote economists at Goldman Sachs in a note. They anticipate a 50 basis point hike in the third quarter.