Malaysia central bank surprises by cutting benchmark rate by 25 basis points

[KUALA LUMPUR] Malaysia's central bank surprised markets by cutting its key interest rate by 25 basis points to 3.00 per cent on Wednesday, saying uncertainties in the global environment could weigh on the country's growth prospects.

Bank Negara Malaysia (BNM) said the ceiling and floor rates of the corridor for its overnight policy rate (OPR) are correspondingly reduced to 3.25 per cent and 2.75 per cent respectively.

"The adjustment to the OPR is intended for the degree of monetary accommodativeness to remain consistent with the policy stance to ensure that the domestic economy continues on a steady growth path amid stable inflation, supported by continued healthy financial intermediation in the economy," BNM said in a statement.

All 13 economists in a Reuters poll had forecast no change to the policy rate on Wednesday.

The central bank last revised the benchmark rate in July 2014, when it was raised by 25 basis points to help curb rising household debt.

REUTERS