Economic Highlights : Bank Negara Raised Its Key Policy Rate By 25 Basis Points To 2.5% - 13/05/2010

Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) raised the Overnight Policy Rate (OPR) by 25 basis points to 2.5% on 13 May. This was the second increase after the Central Bank started to normalise interest rates from the unprecedented low levels on 4 March to prevent financial imbalances from building up. This is especially the case given that the economy surged by a strong double-digit of 10.1% yoy in the 1Q, after turning around in the 4Q of last year. Despite the hike, the stance of monetary policy remains accommodative and supportive of economic growth. Meanwhile, the Central Bank expects inflation to remain moderate in 2010. Inflation is projected to rise gradually during the year, in line with broad-based improvements in economic activities and taking into account possible adjustments in administered prices. At the same time, rising global commodity and food prices may exert some additional upward pressure on domestic prices.

Economic Highlights : Bank Negara Raised Its Key Policy Rate By 25 Basis Points To 2.5% -13/05/2010