Bank Negara Malaysia ( BNM ) in the last meeting had agreed to maintain the current interest rates.
However, did raised a concern over the increase of inflation for next couple of months. Due to government cut back on subsidies for 2 most important product Petrol and Sugar.
As we know, Petrol RON 95 had increased for RM0.20 on last September. And in October government drop another bombshell to withdraw subsidies in sugar. The reason, increase of Diabetic Patients in Malaysia. Really?
On October, Government also had announced a major news about implementation of GST. Everyone will remember this budget as GST budget, whereby our Prime Minister had announced the implementation of GST 6% in year 2015.
In line with the GST 6% implementation in year 2015, Bank Negara (BNM) highlighted they foreseen the increase in inflation to its highest level since 2008.
Therefore, for a precautionary steps the interest rates may raise to 50 basis points in the next year.
Economist already predicted government cutting the subsidies will led to increase in inflation for the next couple of months.
With the raise of fuel and sugar prices respectively RM0.20 & RM0.34, the overall consumer price inflation will be expected rise to 2.7% to 3%.
Malaysia inflation pressure has been heating up, particularly government rationalization RON95 petrol and diesel subsidies in September, surprisingly the consumer price index had increased by only 2.60% .
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