Malaysia’s central bank raises key rate for third straight meeting as inflation risk clouds outlook

Bank Negara Malaysia (BNM) raised its overnight policy rate by 25 basis points to 2.50 per cent

BNM raised rates at its two previous meetings from a historic low of 1.75 per cent. Economists polled by Reuters expect a fourth increase in November

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The Central Bank of Malaysia raised interest rates for the third straight meeting citing inflation risks. Photo: EPA-EFE/File

Published: 4:20pm, 8 Sep 2022Updated: 7:05pm, 8 Sep 2022

Malaysia’s central bank lifted its benchmark interest rate for the third straight meeting on Thursday, as it looks to rein in inflation amid robust economic growth.

Bank Negara Malaysia (BNM) raised its overnight policy rate by 25 basis points to 2.50 per cent, as expected by 19 of 20 economists polled by Reuters.

It was the first time it had delivered three consecutive increases since 2010.

The economists polled also expect a fourth increase in November. BNM had raised rates at its two previous meetings from a historic low of 1.75 per cent.

The central bank said in a statement that indicators pointed to continued growth in the economy, including improved labour market conditions and a recovery in investment activity and tourism following the reopening of borders.

BNM’s monetary policy committee was “not on any preset course and will continue to assess evolving conditions and their implications on the overall outlook to domestic inflation and growth,” it said.