PETALING JAYA: Bank Negara Malaysia (BNM) has decided to cut the Overnight Policy Rate (OPR) by another 25 basis points to 2.5% as the Covid-19 outbreak has taken a toll on the economy.
At 2.5%, it is the lowest level since May 2010.
“The ceiling and floor rates of the corridor of the OPR are correspondingly reduced to 2.75% and 2.25%, respectively,” the central bank said in a statement after the Monetary Policy Committee (MPC) meeting today.
BNM foresees the Malaysian economic growth, particularly in the first quarter, will be affected by the COVID-19 outbreak primarily in the tourism-related and manufacturing sectors.
It noted that the 2020 economic stimulus package will provide some support to economic activity.
“Although domestic growth is expected to gradually improve in the second half of the year, there are key downside risks, mainly stemming from the evolving nature and prolonged impact of the COVID-19 outbreak, and continued weakness in commodity-related sectors.”
BNM said the reduction in the OPR is intended to provide a more accommodative monetary environment to support the projected improvement in economic growth amid price stability.
“The MPC will continue to monitor and assess the balance of risks surrounding the outlook for domestic growth and inflation.”