More interest-rate cuts in the offing in Malaysia?

Still stable: A worker carries building material at a construction site in Kuala Lumpur. Despite the expectation for further interest rate easing, it has been pointed out that economic conditions are not as dire as the days following the 2008 global financial crisis, hence a string of measures may not be on the table. – AFP

WHEN the economy slows down possibly at a faster rate than expected, hopes are pinned on further easing of policies to boost domestic spending.

However, the challenge is to make these policies work and not adversely affect another sector of the economy. Bank Negara had cut the overnight policy rate (OPR) on a pre-emptive basis, by 25 basis points (bps) to 3%. While this makes it cheaper to borrow from banks, it also potentially reduces interest earned from savings.