BNM rate cut: No big impact on margins seen

Kuala Lumpur

COMPARED to the previous steep cuts to the key lending rate of 150 basis points over a six-month period during the global financial crisis of 2008-09, the 25 basis points (bps) reduction announced on Wednesday is not expected to have a sizeable impact on the net interest margins (NIM) of banks.

Analysts expect the impact of the 0.25 per cent cut to have a slight effect but caution that additional easing would further compress margins and dampen earnings.