Malaysia unexpectedly pauses hikes, keeping key policy rate unchanged at 2.75%
[KUALA LUMPUR] Malaysia’s central bank maintained the overnight policy rate (OPR) at 2.75 per cent on Thursday (Jan 19), surprising economists who had anticipated yet another hike of 25 basis points (bps). They are now split on whether this is a temporary pause or an end to the hiking cycle.
The central bank said the decision would allow the country’s Monetary Policy Committee to assess the impact of the cumulative past OPR adjustments, given the lagged effects of monetary policy in the economy.
In a Reuters poll of 27 economists, all but one – who correctly predicted a pause – had expected Bank Negara to hike the OPR to 3 per cent, in an effort to contain inflation and provide support to the ringgit.
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