Image: Reuters Berita 24 English - The Malaysian central bank increased its benchmark interest rate on Wednesday for a second consecutive m...
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| Image: Reuters |
Berita 24 English - The Malaysian central bank increased its benchmark interest rate on Wednesday for a second consecutive meeting in an effort to contain growing inflation while monitoring unexpectedly weak global economic growth.
As predicted by all 22 economists surveyed by Reuters, Bank Negara Malaysia (BNM) raised its overnight policy rate by 25 basis points to 2.25 percent.
In more than ten years, it was the first rise at a successive BNM meeting.
At its most recent meeting in May, BNM increased interest rates from a historically low of 1.75 percent.
The Malaysian economy has "good growth prospects," according to the central bank, and these include stronger domestic demand and a rebound in tourism as a result of the reopening of borders.
However, it added in a statement, "downside risks to growth continue to emerge from a weaker-than-expected rate of global growth, the deepening of supply chain disruptions, and further escalation of geopolitical conflicts."
According to BNM, the estimated range for headline consumer prices in 2022 is 2.2 percent to 3.3 percent higher than a year earlier. However, inflation may be greater in some months due to a weak base impact from power costs.
According to the report, the economy's sustained spare capacity, fuel subsidies, and existing price restrictions would all help to keep inflation in check.
BNM stated that any future changes to interest rates would be modest and measured. Reuters polled a small majority of analysts who predicted another rate increase in September, while some predicted no change.
