Economists see room to cut interest rates
PETALING JAYA: There is room for Bank Negara to cut interest rates to support Malaysia’s economic growth even if inflation rises in the latter part of the year, economists say.According to AmBank Research, there is a strong case for the central bank to lower the benchmark overnight policy rate (OPR), which commercial banks refer to in pricing their lending rates, as signs continue to point to moderating economic growth.
“With a weak underlying inflationary pressure added with the risk of a slower economic outlook, we expect Bank Negara has a strong case for policy easing. The question is whether it will move ahead of the curve or otherwise?” AmBank Research wrote in its report yesterday.
“We expect inflation number to improve gradually as we move ahead partly supported by the low base. Key macro data that unveils current economic conditions and more importantly forward looking are still exhibiting signs of weakness,” the brokerage explained.
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