Friday, July 10

BNM cuts statutory reserves ratio to 3 pct


KUALA LUMPUR: Bank Negara Malaysia will cut the Statutory Reserve Requirement (SRR) ratio to 3.00 per cent from 3.50 per cent effective Nov 16, 2019, to ensure sufficient liquidity in the domestic financial system.

The last time BNM reduced the SSR was in 2016, when the ratio was lowered to to 3.50 per cent from 4.00 per cent.

“The decision to reduce the SRR is undertaken to maintain sufficient liquidity in the domestic financial system.

“This will continue to support the efficient functioning of the domestic financial markets and facilitate effective liquidity management by the banking institutions,” it said in a statement yesterday.

The central bank said the SRR is an instrument to manage liquidity and is not a signal on the stance of monetary policy.

The Overnight Policy Rate (OPR) is the sole indicator used to signal the stance of monetary policy and is announced through the Monetary Policy Statement released after the Monetary Policy Committee meeting, it added. — Bernama