Malaysia is one of that doesn’t really tend to raise the interest rate, and more particularly the key interest rate. But at times, this can happen, and it actually ended up happening recently. This makes Malaysia the first country in SE Asia that ends up tightening its financial policy.
The increase on its own is not that large. It’s around 3.25%, and the previous rate was 3%. So, it’s not a huge bump. But it is a bump, and one that you need to take into account in here. The central bank has tried to implement this for quite some time, which means that it has been in the works for quite some time.
The problem for most people is that this increase doesn’t reflect the buying power. Sure, the Malaysian economy has gotten better, and the government actually seems to forecast a growth of 5.5% this year, which is really good. However, this type of approach may not sit well with everyone. Food costs and fuel costs are rising, which isn’t exactly ideal in such a situation.