KUALA LUMPUR, Jan 20 (Reuters) – Malaysia’s central bank left its benchmark flat rate unchanged on Wednesday, expecting it to provide more financial support to an economy facing new locks among coronavirus cases.
Bank Negara Malaysia (BNM) maintained its overnight policy rate at a low of 1.75%, saying it considered its current monetary position to be “reasonable and appropriate”.
Five out of 15 economists in a Reuters poll had expected the move, but a majority had predicted a rate cut.
Malaysia suffered its first economic downturn in more than a decade last year when COVID-19 hit. While it showed signs of recurrence in the third quarter as coronavirus loops declined, a more serious revolution prompted the government to install new locks earlier this month.
“For 2021, while the reintroduction of tougher restraint measures will impact near-term growth, the impact will not be as severe as the impact in 2020,” the central bank said in a statement. add that the growth pathway would tend to improve “from the second quarter onwards.”
But he added to the overall outlook still under “downside risks”, including any recurrence in coronavirus infections or delays in mass vaccinations.
In a separate statement, BNM said it will extend the flexibility period for government bonded banking institutions to meet their statutory asylum requirements until December 31, 2022, from an earlier expiration date of May 31 this year.
The central bank also said it was committed to using policymakers “as appropriate” to help “sustainable” economic recovery.
The government suspended 14 days from January 13 in the capital of Malaysia and five states. To ease the blow to the economy, Prime Minister Muhyiddin Yassin on Monday unveiled 15 billion ringgit ($ 3.71 billion) in additional stimulus measures.
Muhyiddin has also said that the effects of the restrictions on the economy are expected to be “easy to manage” compared to last year’s national closure between March and April.
$ 1 = 4.0480 ringgit Reporting by Joseph Sipalan; Edited by Ana Nicolaci da Costa