Coping with high interest rate environment
Amid the aggressive rate hikes by Fed, global central banks are racing to increase their rates including Bank Negara Malaysia.
While banks benefit from the rate hikes, the prospect is less rosy for businesses, consumers, and households. Businesses would face rising costs of doing business due to the cost-push effect. When businesses pass on the cost to consumers, households are left with lesser disposable income.
The drop in consumption and spending would eventually erode aggregate demand and affect business prospects.
All in all, no one would be spared in a rising interest rate environment.