KUALA LUMPUR • Malaysia’s central bank cut its key interest rate by 50 basis points to 2 per cent yesterday, its lowest since 2009, to help the South-east Asian economy weather the impact of the coronavirus pandemic and a collapse in prices for its energy exports.
Bank Negara Malaysia (BNM) cut its overnight policy rate a day after the government eased six-week-long curbs on movement and businesses.
It was the central bank’s third cut in as many policy meetings, and had been widely expected by economists polled by Reuters, with the economy expected this year to suffer its worst economic performance in more than a decade.
The central bank’s monetary policy committee said the decision complements other monetary and financial measures implemented so far this year to cushion the economic impact on businesses and households and support the improvement in economic activity.
“The bank will utilise its policy levers as appropriate to create enabling conditions for a sustainable economic recovery,” BNM said in a statement.
Malaysia, which until the middle of last month had the highest number of infections in South-east Asia, has defended its decision to relax curbs. The health authorities yesterday reported 30 new coronavirus cases, raising the total to 6,383 cases. One more death was reported and, so far, 106 people have died in Malaysia.
ING economist Prakash Sakpal said the aggressive cut in interest rates was widely expected, and unlikely to impact markets significantly.
Source: The Straits Times