KUALA LUMPUR: Malaysia’s central bank raised its benchmark interest rate for the third straight meeting on Thursday (Sep 8), as it looks to tame rising inflation.

Bank Negara Malaysia (BNM) lifted its overnight policy rate by 25 basis points to 2.50 per cent, as expected by 19 of 20 economists polled by Reuters.

BNM said in a statement that inflationary pressures have remained high, due to elevated commodity prices and tight labour markets, despite continued easing in global supply chain conditions.

“Consequently, central banks are expected to continue adjusting their monetary policy settings, some at a faster pace, to reduce inflationary pressures. In particular, aggressive adjustments in US interest rates have contributed to a strong US dollar environment,” it added.

The central bank said this has resulted in higher volatility in financial markets, affecting other major and emerging market currencies, including the ringgit.

For the Malaysian economy, BNM said the transition to endemicity and policy measures have contributed to the stronger growth performance in the second quarter of 2022.

“Going forward, indicators point to continued growth, underpinned by support from private sector spending.”