Rate cut signals growth jitters as Malaysia moves to shield economy from tariff threats

[KUALA LUMPUR] Bank Negara Malaysia’s earlier-than-expected rate cut – the first since 2020 – is sending a sign that policymakers are bracing for a tougher second half of 2025 as trade tensions with the United States and weakening global demand cast a shadow over the country’s economic outlook.

On Wednesday (Jul 9), the central bank lowered the Overnight Policy Rate (OPR) by 25 basis points to 2.75 per cent, in a pre-emptive move aimed at supporting growth amid rising external risks.

The OPR, the interest rate for overnight interbank lending, has held steady since its last hike of 25 basis points in May 2023.