AmBank Research maintains its full-year inflation target at one per cent and believes Bank Negara Malaysia (BNM) would keep its rates unchanged after instituting one cut in early May.

In a research note, it said the underlying inflation could stay fairly muted in the near term underpinned by softening domestic sentiments, added with volatile global crude oil prices.

"Looking forward, we expect an uptick in inflation print owing to a low base effect in view of the three-month tax holiday in 2018, as well as a weaker ringgit against the US dollar, which recorded a year-to-date loss of 1.3% to the 4.19 levels," it added.

AmBank Research said headline inflation read at 0.2% year-on-year (y-o-y) in April, unchanged from March but missed market expectations of 0.4%.

"However, inflationary pressure still remained in the negative region when averaged for the first four months at -0.2%, while the core inflation in April grew at the same pace as in March, at 0.5% y-o-y," the research house noted.