KENANGA Research believes that Bank Negara Malaysia would take a more cautious stance before deciding to resume its rate normalisation policy in the monetary system.

In a research note today, Kenanga Research said its move would be dependent on the growth outlook for the second half of this year and beyond as global growth is expected to wither as the base effects fades and fiscal policy support diminishes.

'Nonetheless, we expect BNM may incline to resume its normalisation rate mode from the second half of 2011 on the expectation that domestic demand strengthens further and the global economic growth stabilises.

'We expect it may raise interest rates again by up to 50 basis points in second half of 2011 onwards,' it said.--BERNAMA