PETALING JAYA: Malaysia’s inflation currently is not misbehaving, giving the central bank room to keep up its “conditional pause”, according to Bank Negara Malaysia (BNM) assistant governor Fraziali Ismail.
“If it’s food prices and all the supply shocks, we have a history of seeing through those shocks,” Fraziali said in an interview with Bloomberg Television’s Haslinda Amin today.
“What matters is how it stokes demand. At this juncture, again, we don’t see inflation misbehaving in Malaysia.”
Asked if there is a case to continue hiking rates, he said “that depends on how inflation behaves”.
Fraziali, who has worked at BNM for almost three decades, reiterated the central bank’s 2023 average inflation forecast of between 2.8% and 3.8% during the interview.
While inflation has mostly moderated, boosting market bets that borrowing costs in the region have peaked, price growth is still proving persistent in some places.
The Reserve Bank of Australia unexpectedly increased the key rate for a second straight meeting and kept the door open for more hikes.
Meanwhile, the Bank of Canada also hiked its overnight rate to a 22-year high of 4.75% yesterday, with analysts predicting another increase next month as the economy continues to overheat and inflation remains stubbornly high.