SOUTH-EAST Asia’s third-largest economy Malaysia has been full of surprises of late.

A week ago, Bank Negara Malaysia (BNM) caught the market unawares by raising its Overnight Policy Rate (OPR) by 25 basis points to 2 per cent. The move had surprised pundits, a majority of whom expected the generally measured central bank to sit pat on the rates given the tame inflation figures and wait it out until the next meeting in July.

But inflationary pressures, and imported inflation in particular given that the country is a net importer of food, had forced the central bank’s hand.