Bank Negara aiming to aid growth, makes 1st rate cut since 2016

Bank Negara Malaysia (BNM) became the first in Southeast Asia to cut its key interest rate this year, moving to support its economy at a time of concern about global growth.

It cut its overnight policy rate (OPR) by 25 basis points to 3.00 percent.

The central bank said the rate cut was "intended to preserve the degree of monetary accommodativeness".

"This is consistent with the monetary policy stance of supporting a steady growth path amid price stability," it said in a statement.

Seven out of 13 economists polled by Reuters had expected BNM to cut its benchmark rate to 3.00 percent.

The other six predicted a hold.

BNM last cut the rate in July 2016, to 3.00 percent after the UK's Brexit vote. 

Tuesday's rate change was the first since January 2018, when it was raised to 3.25 percent to "normalise" policy.

 At its last meeting on March 5, BNM expressed confidence the economy could stay on a "steady growth path" despite multiple risks.

In its annual report in March, the central bank cut its 2019 economic growth forecast to 4.3-4.8 percent from an earlier projection of 4.9 percent, on expectations of a significant drop in export expansion.

For the last quarter of 2018, Malaysia said it grew 4.7 percent. It will report the first quarter growth rate on May 16.

On an annual basis, exports shrank a second consecutive month in March, declining 0.5 percent on weak demand for commodities.

- Reuters