How do higher interest rates curb inflation?

Raevathi Supramaniam

Headline inflation has risen for four consecutive months to reach 4.4%, with food inflation hitting a record high of 6.9% in July. – The Malaysian Insight file pic, September 30, 2022.

CENTRAL banks all over the world have been hiking interest rates to keep up with the inflation.

Malaysia has seen three overnight policy rate (OPR) hikes, the most recent by 25 basis points to 2.5% on September 8.

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