Bank Negara Malaysia (BNM) has raised the overnight policy rate (OPR) by 25 basis points (bps) to 2.75%, its fourth consecutive rate hike since May.

BNM said the OPR hike, which increases the cost of borrowing, was needed to control inflationary pressures amid the country’s strengthening economy.

In May, the central bank raised the OPR to 2% from 1.75%, reportedly the lowest on record, following a 25 bps cut in July 2020. It raised the OPR by another 25 bps to 2.25% in July and hiked it up by another 25 basis points (bps) to 2.50% in September.

In a statement, BNM said that inflationary pressures were “more persistent than expected” due to strong demand, tight labour markets, and elevated commodity prices, despite improvements in global supply chain conditions.

BNM said the adjustment would also pre-emptively manage the risk of excessive demand on price pressures.

Source: FreeMalaysiaToday.com