• BNM cuts OPR by 50bps to 2.00%

• BNM outlook on economy remains gloomy

• Banks may use MGS and MGII to meet SRR requirements

• Bank Negara cut rates to ease the pain

Bank Negara Malaysia’s Monetary Policy Committee (MPC) decided to cut the Overnight Policy Rate (OPR) by 50bps to 2.00%, a level last seen during the 2008-09 global financial crisis. The last time the central bank made a 50bps rate cut to 2.00% was on Feb 24, 2009. Earlier, BNM had cut the OPR by 25bps to 2.75% in January, before making another 25bps cut in March to 2.5%.

In a statement issued after its Monetary Policy Committee meeting, BNM said the ceiling and floor rates for the OPR have been reduced to 2.25% and 1.75% respectively. The central bank noted that with this latest cut, the OPR has been reduced by a total of 100bps since the start of the year, complementing the other monetary and financial measures it made, as well as fiscal measures announced this year.

Source: BIMB Securities Research - 6 May 2020