Malaysia's new central bank governor leaves economists puzzled

Kuala Lumpur

AFTER years of monetary policy stability and clear signalling on interest-rate moves, Malaysia's new central bank governor has left economists scratching their heads.

Governor Muhammad Ibra-him's move to cut interest rates this week in only his second policy meeting since taking office in May - surprising all but one of the 18 analysts surveyed by Bloomberg - marked a departure for Bank Negara Malaysia and the precedent set by his well-known predecessor, Zeti Akhtar Aziz.

While the case had been building for an easing in policy, economists were caught off-guard by the timing of the move, expecting the central bank to give a clear signal before adjusting interest rates, as had been past convention. Mr Muhammad told Bernama news agency in an interview on Thursday that the central bank saw a window of opportunity given the slowdown in inflation and cut the benchmark rate by 25 basis points to 3 per cent in a "pre-e…