KUALA LUMPUR, Malaysia – Malaysia’s central bank cut interest rates Tuesday for the first time in nearly three years to help support growth and counter risks from a global slowdown, trade tensions and extended weakness in commodity prices.
Bank Negara Malaysia says it decided to reduce its overnight policy rate, used by banks to calculate interest rates, to 3% from 3.25%.
The rate was last cut by a quarter-basis point to 3% in July 2016, but was raised back to 3.25% in January 2018.
FILE – In this June 6, 2018, file photo, a motorcyclist rides past the Bank Negara Malaysia in Kuala Lumpur, Malaysia. The country’s central bank on Tuesday, May 7, 2019, cut interest rates for the first time in nearly three years to help support growth and counter risks from a global slowdown, trade tensions and extended weakness in commodity prices. (AP Photo/Sadiq Asyraf, File)
The central bank forecast the economy will expand between 4.3-4.8% this year.
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It said in a statement that signs of a tightening in financial conditions called for a rate adjustment to “preserve the degree of monetary accommodativeness.”
Han Tan, a market analyst with FXTM, said the move should help boost domestic consumption and strengthen the Malaysian economy.
