Malaysia Cuts Key Interest Rate Unexpectedly

Malaysia's central bank unexpectedly reduced its interest rate on Wednesday as policy makers said it as a pre-emptive measure to secure growth amid price stability.

The Monetary Policy Committee of Bank Negara Malaysia decided to reduce the overnight policy rate by 25 basis points to 2.75 percent.

The ceiling and floor rates of the corridor of the OPR were correspondingly reduced to 3.00 percent and 2.50 percent, respectively.

The bank was expected to retain its rate at 3.00 percent. The previous change in the interest rate was a quarter-point reduction in May 2019.

"The adjustment to the OPR is a pre-emptive measure to secure the improving growth trajectory amid price stability," the bank said in a statement. The bank said growth in 2019 will be within the projected range and it will gradually improve in 2020, driven by household spending and exports.

In 2019, inflation averaged at 0.7 percent. The bank forecast inflation to average higher but moderate in 2020.

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