(Bloomberg) -- Malaysia’s central bank raised its benchmark interest rate for a second straight meeting in a bid to tame inflation and signaled more measures going forward will be gradual.
Bank Negara Malaysia increased the overnight policy rate by 25 basis points to 2.25%, a move seen by 18 of the 19 economists surveyed by Bloomberg. One saw no change.
The move further rolls back part of the support implemented from 2020, putting the BNM 75 basis points away from restoring the policy rate to its pre-pandemic setting of 3%. Malaysia joins neighboring Philippines in delivering back-to-back rate increases to tame rising costs of living.
Although Malaysia’s latest inflation print at 2.8% appears hardly noteworthy, the headline number doesn’t tell the full picture. Finance Minister Zafrul Abdul Aziz last week warned that inflation rate for May could have topped 11% without subsidies that include price caps on chicken and eggs. Still, food inflation rose at the fastest pace since October 2011.
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