Consumer prices that rose just 2% in May from a year earlier are at risk of accelerating after the cost of diesel jumped 56% last month. That’s due to the government’s move to replace blanket diesel subsidies with targeted assistance. Prime Minister Anwar Ibrahim’s administration has announced a similar plan for RON95 — Malaysia’s most widely-used gasoline — later this year.
Malaysia is expected to keep its benchmark interest rate unchanged on Thursday, with policymakers mindful of potential price pressures from the government’s plans to further reduce fuel subsidies.
Bank Negara Malaysia will maintain the overnight policy rate at 3%, according to all 22 economists in a Bloomberg News survey. The central bank last adjusted borrowing costs in May 2023, with a 25-basis-point hike.
