Cut in statutory reserve requirement to ease funding costs

Afzanizam: Banks will have more cash to lend and invest and the additional liquidity will help to stimulate the lending activities.

The move by Bank Negara to lower the non-interest bearing statutory reserve requirement (SRR) ratio to 3.00% from the current 3.50% will release about RM7.4bil into the banking system and ease funding costs, according to economists.

The central bank said it will lower the SRR ratio effective from Nov 16.