Another OPR cut may be possible due to impact from Covid-19 - MIER

The Malaysian Institute of Economic Research (MIER) does not discount the possibility of another overnight policy rate (OPR) cut being introduced later this year due to the impact from the 2019 novel coronavirus (Covid-19) situation in Malaysia.

Chairperson Kamal Salih said the move would promote economic growth and provide sufficient liquidity in the market.

He told reporters this during a press conference on the impact of the Covid-19 outbreak on the Malaysian economy in Kuala Lumpur today.

On Jan 22, Bank Negara Malaysia (BNM) reduced the OPR by 25 basis points to 2.75 percent - the lowest since 2011.

Meanwhile, MIER deputy director Prof Jamal Othman said the Covid-19 outbreak is under control in Malaysia as the government has done a good job in containing the outbreak.

"However, the institute expects the country’s gross domestic product to be lower by about 0.15 percent or by as much as 0.77 percent in the first quarter of 2020.

“Chinese tourist expenditure in Malaysia is expected to decrease by 25 percent, while wholesale and retail sales are expected to decline by one to two percent,” he said.

Kamal said unemployment in tourism-related sectors, especially in air travel and recreational services, might range from as low as 0.5 percent or as high as 3.5 percent.

He said tourism and manufacturing industries are the most affected by the Covid-19 and urged Malaysians to help spur the economy and play their role to ensure the success of Visit Malaysia 2020.

“It is pretty safe to move around here in Malaysia and domestic tourism would certainly cushion the outbreak’s impact to our economy,” he said.

- Bernama