Malaysia has just reported a strong growth of 10.1% for the 1st quarter of 2010, led by strong recovery in exports! On the other hand, Central Bank has also raised the OPR (Overnight Policy Rate) or the official interest rate by another 25 basis point. That means Bank's BLR will go up likewise, by the same token at the very least.
Seems Malaysia represents only the handful countries in Asia that keeps pushing up interest rates...
In a way no surprises to me, given BNM's normalization process as economy recovers. In fact, I expect another rate hike coming around July after the announcement of 2nd quarter GDP.
Does this mean all are hunky dory from now on? Not quite. Much will still depend on how the current European (PIIGS) sovereign debt crisis pan out. Greece has been bailed out no doubt, but that could well be just the tip of the iceberg!
If things turn out for the worst, then we should expect economy to start turning down again in the second half of this year.. Expect to have an eventful second half! In the midst of another potentially looming crisis, the consolation is that we can at least sit back and enjoy the upcoming football World Cup.....It will be another set of drama for sure!
