Bank Negara will meet on July 5 and 6 and is likely to announce a rate hike of 25 to 50 basis points.
Bank Negara has already announced a 25 basis point increase in the overnight policy rate (OPR) in May, and lenders have begun to feel the pressure of the rate hike to repay their loans.
The Bank is expected to raise interest rates two more times in the second half of the year, that is, by 50 and 25 basis points, respectively, to end the year at 2.50 to 2.75%. The National Bank will hold three more MPC meetings in the second half of the year, in July, September and November.
The next MPC meetings are on July 5 and 6, September 7 and 8, and November 2 and 3.
Central banks around the world have accelerated the pace of interest rate hikes to curb domestic inflation. If the National Bank does not step up its pace of interest rate hikes, domestic inflation will intensify, foreign capital will accelerate outflows, and the RM will depreciate significantly.
The National Bank’s interest rate hike is also a preparation for the next recession, in case the country’s economy is in recession again, the National Bank will have room to lower interest rates to boost the economy.
