Inflation in the country continued to soar to 4.7 percent in August and the National Bank may raise interest rates again in November to curb inflation.
According to data released by the Department of Statistics Malaysia, our inflation rate reached 4.7% in August, with inflation in Peninsular increasing by 4.7%, Sabah 4.3% and Sarawak only 3.9%.
Our food inflation is as high as 7.2%, which is the category that people feel the most. People can clearly feel that the price of all kinds of vegetables and meat are increasing and less food can be purchased with the same denomination of banknotes.
In order to curb inflation in the country, the possibility that the National Bank will raise interest rates again in November has also increased. The National Bank has already raised interest rates by 0.25% in May, 0.25% in July and 0.25% in September, and the National Bank’s overnight policy rate (OPR) is currently 2.50%.
If the NBP raises rates by another 0.25% in November, the overnight policy rate will be 2.75%. This rate is also just back to the level before the epidemic occurred in 2020.
Many people are in agreement with the National Bank’s frequent interest rate hikes and hope that it can increase the rate. However, there are also many people who are strongly opposed to the idea, most notably borrowers, because the National Bank’s interest rate hike will result in borrowers having to pay more on their monthly loans.
Given that inflation is still rising in the country and the Federal Reserve continues to raise interest rates, it is unlikely that the National Bank will slow down the pace of interest rate hikes, so experts predict that it will raise interest rates by 0.25% in November, January and March respectively. The overnight policy rate will likely be 3.25% in March next year.
