Challenges in controlling inflation with OPR

INFLATION is an economic phenomenon characterised by a general increase in the prices of goods and services in an economy over a period of time. Bank Negara Malaysia (BNM) has the mandate to control inflation by setting and adjusting the Overnight Policy Rate (OPR) as part of its monetary policy tools. However, despite the best efforts of BNM to control inflation, it persists. There are several reasons why inflation cannot always be controlled by BNM through OPR adjustments.