• BNM cuts OPR by 25bps to 1.75%

• Bank Negara cut OPR to historic low on pandemic resurgence risk

• We expect no more rate cut in 2020

Bank Negara Malaysia’s Monetary Policy Committee (MPC) decided to reduce the overnight policy rate (OPR) by another 25bps to a record low of 1.75%, aiming to provide additional policy stimulus to accelerate the pace of economic recovery from the coronavirus-induced crisis. BNM said that the impact of the Covid-19 pandemic on the global economy is severe and that Malaysia’s economic activity contracted sharply in the second quarter of the year due to measures introduced to contain the pandemic.

In a statement issued after its Monetary Policy Committee meeting, BNM said the ceiling and floor rates for the OPR correspondingly reduced to 2.00% and 1.50%, respectively.

Source: BIMB Securities Research - 8 Jul 2020