07.07.202007:12:00UTC+00Malaysia's Central Bank Cuts Key Rate By 25 Bps

Malaysia's central bank reduced its key interest rate by a quarter-point to support economic recovery.

The Monetary Policy Committee of Bank Negara Malaysia on Tuesday decided to reduce the overnight policy rate by 25 basis points to 1.75 percent as expected.

The ceiling and floor rates of the corridor of the OPR were correspondingly reduced to 2.00 percent and 1.50 percent, respectively.

The central bank had reduced its rate by 50 basis points in May.

The bank said it will continue to utilize policy levers as appropriate to create enabling conditions for a sustainable economic recovery.

Economic activity contracted sharply in the second quarter due to measures introduced to contain the coronavirus pandemic, the committee noted.

Following the gradual and progressive re-opening of the economy since early May, economic activities started to recover from the trough in the second quarter.

The fiscal stimulus packages coupled with monetary and financial measures will continue to underpin the improving economic outlook, the bank said.