PETALING JAYA: The measure by Bank Negara to allow banks to count the Malaysian government securities (MGS) and the Malaysian government investment issues (MGII) that they hold as part of their statutory reserve requirement (SRR) is a boost for banks as it can lower the funding costs of lenders.
Banking analysts said this following the central bank’s decision on Tuesday to cut the overnight policy rate (OPR) to 2%, down by 50 basis points, and change the SRR ruling to allow banks to use MGS and MGII for SRR compliance.