Malaysia cuts interest rate for first time in 3 years

May 07, 2019 - 5:33 am

KUALA LUMPUR, Malaysia (AP) — Malaysia's central bank has 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.

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.

The central bank forecast the economy will expand between 4.3-4.8% this year.

It said in a statement Tuesday that there are signs of tightening of financial conditions and that the rate adjustment was to "preserve the degree of monetary accommodativeness."

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