KUALA LUMPUR – Kenanga Research expects Bank Negara Malaysia (BNM) to do the necessary to support the economy if the pace of recovery falters over the coming months, as it still has ample room to cut interest rates.
However, any decision to alter its policy path will be determined by the impact from the large fiscal stimulus, which has, so far, been promising, given the third quarter of 2020 gross domestic product growth performance, the research firm said in a note today.
“Since the economy might suffer from the latest wave of Covid-19 outbreaks, it would increase the likelihood of the easing cycle resuming.
“Nonetheless, for now, we see a higher probability that BNM would keep the overnight policy rate unchanged at 1.75%, on the back of improvement in some segments of the economy, as well as positive development on Covid-19 vaccine,” it said. – Bernama, December 17, 2020
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