The Bank of Malaysia (BNM) raised interest rates more than expected from a record low of 1.75% to 2% to ease inflationary pressures as the country continues to recover from COVID-19.
Economists had previously expected interest rates in Malaysia to remain unchanged, with the BNM likely to raise rates next quarter to avoid further inflationary pressures. However, some economists expect an immediate rate hike.
BNM states that the latest indicators show that economic growth has remained stable. Also, the unprecedented situation during the coronavirus, which required an interest rate cut, has eased.
In addition, BNM stated, “The inflation outlook continues to depend on changes in global commodity prices. This is mainly due to the ongoing military conflict in Ukraine. This includes protracted supply disruptions as well as political measures to control domestic product prices.