PETALING JAYA: Bank Negara Malaysia’s Monetary Policy Committee today slashed its Overnight Policy Rate by 25 basis points to 3%.Malaysia’s economy grew by 4.7% in 2018 and the government maintains an official growth projection of 4.9% in 2019. However, actual growth could disappoint as the economy faces numerous external headwinds and high debt levels.
Nazari Ismail, a professor of economics at University Malaya told FMT that the rate cut was to counter a slowing economy. “But since this is also going to be accompanied by increased debt level in the economy, it will also mean there is an increase in the risks associated with debt growth. If household debt increases further, any global economic slowdown will mean more Malaysians will be financially exposed in the future,” said Nazari
Obviously, our economy is in a downward spiral as many have lost confidence and are pessimistic. BNM needs to shore up confidence but such a move may also backfire as it confirms the shit situation we are in and more will run away.