With our inflation rate hitting a high of 4.4% in July, the National Bank is bound to raise interest rates next month and the government may also increase its BKM aid handout to ease people’s burden of living.
According to data released by the Department of Statistics, the country’s inflation rate was 4.4% in July, which is higher than the 3.4% in June. The price of meat rose by 12%, while vegetables rose by 7.1% and fish and seafood by 4.2%.
With our inflation rate climbing again, the expectation that National Bank will raise interest rates in September has become more certain. The Bank is expected to announce an increase in the overnight policy rate (OPR) in September, from the current 2.25% to 2.50%, which will also lead to an increase in lending and term deposit rates.
With domestic inflationary pressures coupled with a strong rate hike in the form of the Federal Reserve, it is almost a foregone conclusion that the National Bank will raise interest rates in September and it is now up to the National Bank to raise the rate by 0.25% or 0.50%.
In addition, Prime Minister previously said that the government would not rule out the possibility of increasing the BKM if inflation in the country rose further. In June, the government increased the payment of RM100 to BKM recipients in the family category and RM50 to BKM recipients in the single category.
The government may increase the BKM payment to existing BKM recipients in September.
