Malaysian central bank, known as Bank Negara Malaysia (BNM). (Photo: malaysiandigest.com)Kuala Lumpur (VNA) – After the Malaysian central bank (BNM)’s second overnight policy rate (OPR) cut on March 3, economists said that it will decide to shave off the key rate again and the cut will happen as early as May.
It is premised on further downside risks emanating from the evolving COVID-19 outbreak and the global economic downturn.
According to the Hong Leong Investment Bank Bhd, though the BNM projected growth to improve in the second half of this year, the Malaysian Monetary Policy Committee (MPC) said unclear policies of the new government coupled with the COVID-19 outbreak and external risks could hamper the economic recovery.
Another 25 percentage point cut by the BNM remains on the table that would bring the key rate down further to 2.25 percent, it said.
On March 3, the BNM cut its OPR to the lowest in 20 years at 2.5 percent, with the aim to support the economy.
The decision is to create a more suitable financial environment to back the growth pace of the national economy.
This was the central bank’s second cut in less than three months, with the first being 0.25 percentage point reduction to 2.75 percent.
To mitigate the economic impact of the epidemic, the Malaysian Government has released an economic stimulus package worth 20 billion RM (4.78 billion USD) in an effort to address the outbreak’s impacts, catalysing people-based growth, and encouraging quality investment./.
VNA
