Surprise rate hike

“The move to up rates could now mean more of containing capital outflows and supporting the ringgit. This could now mean that there is ample room for another rate hike in the second half of the year,” AmBank Group chief economist Anthony Dass, who is also a member of the Economic Action Council Secretariat, said.

PETALING JAYA: Bank Negara has in a surprise move hiked the key benchmark interest rate, the overnight policy rate (OPR), by 25 basis points (bps) to 2% against most economists’ expectations of it being kept at 1.75%.

Economists told StarBiz they were startled by the central bank’s decision to raise the OPR so soon, but agreed the move could be to contain capital outflows and support the ringgit.