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Malaysia Keeps Interest Rate at 2.75%, Awaiting Impact of Four Consecutive Rate Hikes

The Bank of Malaysia has decided to keep its policy rate unchanged at 2.75% at a meeting today, saying it is evaluating the impact of four consecutive rate hikes in 2022. The decision was held against analysts’ expectations of the Malaysian central bank raising interest rates by 0.25% to 3%.

The central bank stated that the interest rate decision at today’s meeting would give the central bank’s committee an opportunity to assess the impact of recent rate hikes. As for the normalization of interest rates in the future, it will depend on various factors involved, including indicators of inflation and the growth prospects of the domestic economy.

The Malaysian economy has recovered strongly from the COVID crisis and the central bank expects economic growth throughout 2022 to be higher than expected at 6.5-7%. However, the Malaysian government expects the economy to grow by only 4-5% in 2023 due to the slowing global economy.

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