Moody’s Analytics expects Bank Negara Malaysia to hike its overnight policy rate by 25 basis points to 2.5 percent this week, which will be its third consecutive rate hike, aiming to help ease the country’s inflation coupled with a robust economic rebound.
It said Malaysia’s headline consumer price index rose by 4.4 percent year-on-year in July, a full percentage point increase from the previous month.
“Meanwhile, Malaysia’s second-quarter gross domestic product came in far above expectations, driven by an uptick in demand for services after borders fully reopened in April,” it said in a statement.
On the external front, raising the overnight policy rate will shore up the ringgit, which has been slipping against the greenback amidst aggressive rate hikes by the US Federal Reserve, it said.
The central bank is scheduled for its September Monetary Policy Committee meeting on September 7-8, 2022.
