KUALA LUMPUR: Bank Negara Malaysia has announced a 100 basis point cut in the statutory reserve requirement (SRR) ratio, bringing it down from 2.00 per cent to 1.00 per cent effective May 16.
The central bank said the move is part of its continuous efforts to ensure sufficient liquidity in the domestic financial system.
“This will facilitate banks to better manage liquidity in an environment of greater financial market volatility and provide continued support for financial intermediation activity.
“The SRR reduction will release RM19 billion worth of liquidity into the banking system,” it said in a statement.
In addition, Bank Negara said the SRR is an instrument to manage liquidity and is not a signal regarding the monetary policy stance.
The overnight policy rate is the sole indicator used to signal the stance of monetary policy.
It is announced through the monetary policy statementl released after the Monetary Policy Committee meeting, the bank said.
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