Fitch Solutions Predicts BNM to slash OPR to 1.0% by End-2020

Fitch Solutions Country Risk and Industry Analysis (Fitch Solutions) predicts that Bank Negara Malaysia (BNM) will reduce the overnight policy rate (OPR) by another 100 basis points (bps) to 1.0% by the end of 2020, in an effort to revive demand and market operations that are now languishing as a result of the COVID-19 pandemic.

The rating agency stated that Malaysia's economy has weakened dramatically as a result of the movement control order (MCO) imposed to curb the spread of COVID-19, adding that the eventual relaxation of restrictions is unlikely to spark an imminent recovery of local companies. Further, limited fiscal policy options, exacerbated by low oil prices, make monetary policy tools more important to the G...