Malaysia: BNM to cut its policy rate – Standard Chartered

Bank Negara Malaysia (BNM) is scheduled to announce its monetary policy rate decision on 3 March and the Department of Statistics will release January trade data on 4 March. Strategists at Standard Chartered Bank expect a policy rate cut. 

Key quotes

“We expect the overnight policy rate to be cut 25bps to 2.5% from 2.75% previously.” 

“While some market participants expect a 50bps cut, we feel a calibrated decision is more appropriate to address the evolving coronavirus situation and optimise the monetary policy space, given that a sharper rate cut may be less effective in boosting demand at this point in time.”

“We expect exports to have expanded 0.7% y/y due to the potential frontloading of exports before Lunar New Year in late January, while we expect imports to have contracted 1.5%. The trade surplus likely widened to MYR 13.2bn from MYR 12.6bn previously.”