Fitch Forecasts BNM to Further Reduce its Interest Rates to Boost Malaysia’s COVID-19 Economy

The Fitch Solutions Country Risk and Industry Research (Fitch Group Unit) forecasts Bank Negara Malaysia (BNM) to cut down interest rates to 1.50% by the end of 2021 to tackle the economic repercussions of COVID-19. The inflation rate is estimated to remain at 1.8% resulting in BNM to cut down policy rates further owing to the absence of fiscal resources for stimulus spending.

Why it matters?

The efforts of BNM will cushion the blows to Malaysia’s economy due to the third-wave infections of COVID-19 and the reinstatement of the Movement Control Order (MCO) in January 2021. With Malaysia’s debt level increasing to 61% in 2020, this measure coupled with additional fiscal injections will uplift the economy. It is timely, considering Malaysia&...