Malaysian Central Bank Rate Hike Had Not Been Expected
May 3, 2023
As at the Central Bank of Colombia last Friday and the Reserve Bank of Australia yesterday, officials at Bank Negara Malaysia today sprang a 25-basis point rate hike surprise on unsuspecting market analysts. Malaysia’s central bank policy interest rate now becomes 3.0%, completely reversing the 125 basis points of rate reduction in 2020 when the world economy was hit by Covid. Four rate hikes last year administered in May, July, September and November were each 25 basis points in size, but the ensuing two earlier scheduled policy reviews this year favored no rate change to assess the impact of last year’s tightening. Malaysian economic growth last year was the most in 22 years, and CPI inflation of 3.4% currently is still higher than desired. “The balance of risk to the inflation outlook is tilted to the upside and remains highly subject to any changes to domestic policy including on subsidies and price controls, financial market developments, as well as global commodity prices.”
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank Negara Malaysia
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