Bank Negara aiming to aid growth, makes 1st rate cut since 2016


Modified 7 May 2019, 8:05 am

Bank Negara Malaysia (BNM) became the first in Southeast Asia to cut its key interest rate this year, moving to support its economy at a time of concern about global growth.

It cut its overnight policy rate (OPR) by 25 basis points to 3.00 percent.

The central bank said the rate cut was "intended to preserve the degree of monetary accommodativeness".

"This is consistent with the monetary policy stance of supporting a steady growth path amid price stability," it said in a statement.

Seven out of 13 economists polled by Reuters had expected BNM to cut its benchmark rate to 3.00 percent.

The other six predicted a hold.

BNM last cut the rate in July 2016, to 3.00 percent after the UK's Brexit vote. 

Tuesday's rate change was the first since January 2018, when it was raised to 3.25 percent to "normalise" policy.

 At its last meeting on March 5, BNM expressed confidence the economy could stay on a "steady growth path" despite multiple risks.

In its annual report in March, the central bank cut its 2019 economic growth forecast to 4.3-4.8 percent from an earlier projection of 4.9 percent, on expectations of a significant drop in export expansion.

For the last quarter of 2018, Malaysia said it grew 4.7 percent. It will report the first quarter growth rate on May 16.

On an annual basis, exports shrank a second consecutive month in March, declining 0.5 percent on weak demand for commodities.

- Reuters


Share this story

By posting a comment, you agree to our Terms & Conditions as stipulated in full here


Foul language, profanity, vulgarity, slanderous, personal attack, threatening, sexually-orientated comments or the use of any method of communication that may violate any law or create needless unpleasantness will not be tolerated. Antisocial behaviour such as "spamming" and "trolling" will be suspended. Violators run the risk of also being blocked permanently.


Please use the report feature that is available below each comment to flag offending comments for our moderators to take action. Do not take matters in your own hands to avoid unpleasant and unnecessary exchanges that may result in your own suspension or ban.