Malaysia raises key policy rate to 3% as domestic growth prospects stay ‘resilient’

[KUALA LUMPUR] Malaysia’s central bank raised its overnight policy rate (OPR) by 25 basis points to 3 per cent on Wednesday (May 3), in the first hike since November, surprising economists who had mostly anticipated a continued pause by Bank Negara.

After this unexpected tightening, however, economists expect the central bank to keep policy accommodative for the rest of this year.

After the Monetary Policy Committee (MPC) paused rate hikes in its January and March meetings, 21 out of 25 economists surveyed in a Reuters poll had thought the central bank would keep the interest rate unchanged at 2.75 per cent in May.