Malaysia cuts interest rate for first time

KUALA LUMPUR, May 07 (AFP): Malaysia's central bank Tuesday cut its key interest rate for the first time in almost three years as it looks to boost slowing growth as China-US trade tensions weigh on the economy.

The move comes as central banks around the world adopt a more dovish stance in the face of a weak global outlook.

Bank Negara Malaysia cut the rate from by 25 basis points to 3.00 per cent, the first reduction since July 2016. The last change was in January 2018 when borrowing costs were increased to 3.25 per cent.

The bank said "considerable downside risks to global growth remain, stemming from unresolved trade tensions and prolonged country-specific weaknesses in the major economies".

"Heightened policy uncertainties could lead to sharp financial market adjustments," it added.

Malaysia is showing signs of being affected by the long-running trade dispute between Beijing and Washington, while the global economy at the same time shows signs of softness.

The cut comes as central banks from Japan to Europe to the United States look to provide monetary support or ease up on tightening measures.

Malaysia's exports declined 0.5 in March from a year earlier due to fewer shipments of electronics and commodities.