Malaysia's central bank raises SRR Ratio to 4%

Bank Negara Malaysia has raised the Statutory Reserve Requirement ratio from 3.0 % to 4.0 %.

However, it maintained the Overnight Policy Rate at 3.0 per cent after its Monetary Policy Committee meeting. day.

The central bank said the increase in SRR ratio will be effective July 16.

"The decision to raise SRR is undertaken as a measure to manage the significant build-up of liquidity, which may result in financial imbalances and create risks to financial stability," it said.

"In the domestic economy, the latest indicators point to a moderation in growth in the second quarter, due primarily to slower external demand, greater than expected disruptions in the global manufacturing supply chain and lower than projected public sector investment," it said.

Although outlook for growth remains positive, there are heightened uncertainties arising from global developments that have created higher downside risks to growth, the central bank said.

"The MPC will assess carefully the evolving economic conditions and to the extent that the growth momentum is sustained, further normalisation of monetary conditions will be considered to safeguard price stability," it said.

The full story is available at Bernama.