KUALA LUMPUR: Malaysia's central bank unexpectedly cut its key interest rate by 25 basis points to 2.75% on Wednesday, aiming to spur private spending and protect economic growth.
Bank Negara Malaysia (BNM) said it expects growth to gradually improve with support from private spending, improved external demand and a modest recovery in overall investment activity underpinned by ongoing and new projects.
"However, downside risks to growth remain," the central bank said in a statement.
"These include uncertainty from various trade negotiations, geopolitical risks, weaker-than-expected growth of major trade partners, heightened volatility in financial markets, and domestic factors that include weakness in commodity-related sectors and delays in the implementation of projects."
Nearly all of the 14 economists in a Reuters poll had expected BNM to keep the rate unchanged. Only one predicted a 25 basis point cut.