With central banks around the world on the way to raising interest rates, how long can the policy of no interest rate hike by the National Bank of Malaysia last for now?
The Federal Reserve announced a 50 basis point interest rate hike in May, the largest rate hike in 22 years. The Fed had already raised interest rates by 25 basis points in March and recently announced another 50 basis point hike, with the US federal funds rate now sitting at 0.75% to 1%.
Brazil also announced a 100 basis point rate hike on 4 May, which means a hike to 12.75% from the previous 11.75%. The Hong Kong Monetary Authority also announced a 50 basis point rate hike on 5 May, having sent an increase from 0.75% to 1.25%.
The Central Bank of Chile also announced a 125 basis point rate hike, with the latest rate now at 8.25%. India also raised interest rates for the first time in four years, announcing a 40 basis point increase from 4% to 4.40% on 4 May.
In addition, Australia also announced a 25 basis point rate increase on 3 May, from 0.1% to 0.35%, the first rate increase in 12 years. The UK announced a 25 basis point rate hike on 5 May, raising the key rate from 0.75% to 1%.
Bank Negara will hold a monetary policy meeting on 10 and 11 May and will announce whether it will raise interest rates at the end of the meeting. The Bank is expected to keep the rate unchanged and will wait until the second half of the year before raising the rate twice.
