Bank Negara Malaysia today raised the overnight policy rate (OPR) by another 25 basis points to 2.5%, in its third hike this year.
At the height of the Covid-19 pandemic in July 2020, BNM reduced the OPR to 1.75% – Malaysia's lowest level ever.
It maintained this level until May 11 this year, when it raised the OPR by 25 basis points or 0.25% to 2.00%.
On July 6, the central bank raised the OPR again by another 25 basis points to 2.25%.
In its monetary policy statement today, it said the ceiling and floor rates of the OPR corridor were correspondingly increased to 2.75% and 2.25%.
“The global economy continues to expand, albeit at a slower pace, weighed down by rising cost pressures, tighter global financial conditions and strict containment measures in China.
“However, global growth continues to be supported by improvements in labour market conditions and the full reopening of most economies and international borders,” it added.
It also noted that inflationary pressures had remained high due to elevated commodity prices and tight labour markets, despite continued easing in global supply chain conditions.
Consequently, it said central banks were expected to continue adjusting their monetary policy settings, some at a faster pace, to reduce inflationary pressure.