KUALA LUMPUR- Malaysia’s central bank cut its key interest rate for the fourth straight meeting to a record low as policymakers sought to support a budding recovery in Southeast Asia’s third largest economy, which has been battered by the coronavirus pandemic.
Bank Negara Malaysia (BNM) eased its overnight policy rate (OPR) by 25 basis points to 1.75 percent as expected by a slim majority of economists in a Reuters poll.
While the coronavirus-ravaged economy had begun to rebound recently after government restrictions to contain the virus were eased, the central bank flagged various domestic and external “downside risks” to that recovery from further outbreaks to weaker-than-expected global growth.
“Although a trough is expected in the second quarter, broad-based weakness in labor markets and precautionary behavior by households and businesses could affect the recovery going forward,” the central bank said in a statement, referring to the outlook for the global economy.
“The MPC (Monetary Policy Committee) will continue to assess evolving conditions and their implications on the overall outlook for inflation and domestic growth.”
Malaysia’s economy grew just 0.7 percent in the first quarter, hit by the twin effects of the pandemic and plunging global energy prices. — Reuters
