KUALA LUMPUR, Aug 6 — Bank Negara Malaysia (BNM) may cut its key interest rate in the next three to six months, partly because the world economy has worsened following the escalating United States (US)-China trade dispute, said CIMB Group chief economist Donald Hanna.
He said there was about a 60 per cent chance of another rate cut, unfortunately, on the back of the likely increase in tariffs on Chinese products in September by the US, which was an external blow to an open economy like Malaysia.
The next three to six months, he said, would also depend on the US Federal Reserve’s plan on its interest rate policy and impact of the US tariff on Chinese products.
“Other Asian central banks will soon follow the policy direction of US interest rates movement,” he told reporters after the ASEAN+3 Regional Economic Outlook 2019 Roadshow here, today.
In May this year, BNM reduced the overnight policy rate to three per cent from 3.25 per cent previously, the first time it has cut the rate since July 2016.
Previously, US President Donald Trump said he will impose a 10 per cent tariffs on another US$300 billion (RM1.25 trillion) of Chinese-made products starting September 1, which would effectively put a tax on all Chinese goods coming into the US. — Bernama
