Malaysia hikes interest rates for second time this year

Malaysia's central bank raised rates by 25 basis points to 2.25 per cent on Wednesday, the second interest rate hike this year.

The ceiling and floor rates of the corridor of the overnight policy rate OPR were correspondingly increased to 2.50 per cent and 2.00 per cent.

The hike was made by Bank Negara Malaysia BNM in a statement to further adjust its degree of monetary accommodation due to the positive growth prospects for the Malaysian economy.

It said that this is consistent with the Monetary Policy Committee's view that the unprecedented conditions that necessitated a historically low OPR have continued to recede. The decision to hike the second rate was made by the BNM after its fourth monetary policy committee meeting of the year.

It said that the stance of monetary policy remains accommodative and supportive of economic growth at the current OPR level.

The MPC will continue to assess the changing conditions and their impact on the overall outlook for domestic inflation and growth.

Any changes to the monetary policy settings going forward would be made in a measured and gradual manner, to ensure that monetary policy is accommodative to support a sustainable economic growth in an environment of price stability, said BNM.