KUALA LUMPUR (Jan 26): CIMB Group says the key interest rate hike by Bank Negara Malaysia (BNM) is expected but it does not foresee any further hike in the near term.

Its Group Chief Executive Officer, Tengku Datuk Seri Zafrul Aziz said the rate hike was something that CIMB had been expecting.

“Going forward, we feel that this is still supportive of Malaysia’s current strong growth trajectory. The modest 25 basis-point hike is something that we feel the market is able to absorb, particularly with the stronger ringgit and with the government having a firm grip on inflation,” he said in a statement.

However, he does not expect any further interest rate hikes in the near term.

“But whatever the macro situation, CIMB is ever ready and well-equipped to help our customers navigate interest rate hikes and other business challenges, whether in Malaysia or in ASEAN,” he said.

BNM increased the Overnight Policy Rate (OPR) by 25 basis points to 3.25 per cent at the Monetary Policy Meeting as it decided to normalise the degree of monetary accommodation amid the economy being firmly on a steady growth path.

“The floor and ceiling rates of the corridor for the OPR are correspondingly raised to 3.00 per cent and 3.50 per cent, respectively,” the Central Bank said in a statement here, yesterday.

The last time BNM changed its key rate was in July 2016 when it made a 25 basis-point cut.