Malaysia's central bank on July 10 raised its benchmark interest rate to 3.25 percent to curb inflation, the first hike in more than three years keeping it at 3 percent.

The Bank Negara’s Monetary Policy Committee said it decided to adjust the degree of monetary accommodation amid the firm growth prospects and inflation remaining above its long-run average.

The economy grew at a robust pace of 6.2 percent in the first quarter from a year earlier, driven by strong domestic demand and recovery in net exports. In the first five months of this year, the inflation averaged at 3.4 percent due to higher costs in utility and transport sectors.

Economist Julia Goh from the CIMB Investment Bank reiterated her group’s view that the hike would only take place in September, contrary to the consensus view of a hike in July.

Meanwhile, Executive Director of the Franklin Templeton Asset Management Hanifah Hashim said it is a right move that bodes well for the Malaysian economy.

The World Bank has forecast that the Malaysian economy will expand by 5.4 percent this year thanks to booming exports and feasible financial and monetary tightening policies.-VNA