Bank Negara will meet on July 5 and 6 and will likely announce another 25 basis point rate hike.
Bank Negara’s surprise announcement in May that it was raising its overnight policy rate (OPR) came as a surprise to many. Lenders are also starting to feel the pressure to repay their loans as a result of the rate hike.
It is generally expected that the NB will raise interest rates two more times in the second half of the year, which means that the rate will be raised by 25 basis points each and will end the year at 2.50%. The Bank will also hold three monetary policy meetings (MPC) in the second half of the year, in July, September and November.
The next monetary policy meetings are 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.
