Malaysia reduces interest rates to record low

Malaysia's central bank on July 7 reduced its interest rates to a record low to fight the impact of the COVID-19 pandemic, and warned that the pace of economic recovery was uncertain.

08, Jul. 2020

Image by Squirrel_photos from Pixabay
Image by Squirrel_photos from Pixabay

HANOI, VNA - Malaysia's central bank on July 7 reduced its interest rates to a record low to fight the impact of the COVID-19 pandemic, and warned that the pace of economic recovery was uncertain.

Bank Negara Malaysia (BNM) cut its key rate by 25 basis points to 1.75 percent and warned that the Malaysian economy had contracted sharply in the second quarter of 2020 because of the strict lockdown. This is the fourth consecutive time the central bank has lowered its interest rates.

The bank said in a statement that business activities have been recovering and that the government’s stimulus packages will continue to underpin the improving economic outlook.

However, the pace and strength of the recovery remain subject to downside risks, including future outbreaks and a weaker-than-expected rebound in global growth, it added.

Southeast Asia's third-biggest economy has been largely dependent on trade, and its key exports include palm oil, crude oil and natural gas.

Most businesses were closed and people were forced to stay at home since mid-March as the outbreak accelerated, although authorities have been easing curbs since early May and life is gradually returning to normal.

The country's outbreak has been small as it has recorded about 8,600 cases and 121 deaths, but the lockdown is nevertheless believed to have cost the economy billions of dollars. - VNA