Malaysia’s central bank cut its key interest rate on Tuesday to the lowest level since 2010 to combat the impact of the new coronavirus, which has battered economies worldwide.
Bank Negara Malaysia slashed the rate by 25 basis points to 2.5%, as expected by economists, in its second cut this year.
It came as Australia’s central bank reduced rates to a record low and as other institutions including the Federal Reserve, Bank of Japan and European Central Bank vow action.
Announcing the move, Malaysia’s central bank said growth “will be affected by the Covid-19 outbreak primarily in the tourism-related and manufacturing sectors.”
More than 3,100 people have been killed and over 90,000 infected globally since the virus emerged in the Chinese city of Wuhan in December, although the crisis has shifted with more new cases now being recorded outside China.
Malaysia has so far reported 36 cases of the disease.
The government last week announced a US$4.7 billion stimulus package to fight the impact of the virus, including tax breaks and cash aid.
The cut also comes amid a political crisis in Malaysia after a reformist government collapsed a week ago and Muhyiddin Yassin took office as prime minister backed by a scandal-mired party.
Ex-leader Mahathir Mohamad, 94, is now challenging the new government’s legitimacy.