Bank Negara Malaysia today announced that the Overnight Policy Rate (OPR) is raised by 25 basis points to 3.25 percent. The ceiling and floor rates of the corridor for the OPR are correspondingly increased to 3.50 percent and 3.00 percent respectively.

Malaysia's economic growth strengthened in the second-half of 2005 and is expected to gain momentum in 2006, sustained by private sector demand and strong economic growth in the global and regional economies. Inflationary conditions have remained, mainly on account of higher energy prices and rising costs. While inflationary pressures are not expected to intensify, the rate of inflation is expected to remain in the region of the current levels for some time.

The change in the OPR is intended to align monetary conditions to the current environment. The stance of monetary policy continues to remain supportive of economic activity. Going forward, monetary policy would respond to new developments that have implications for the medium term prospects for price stability and sustainable economic growth.