Boost economy with interest rate cut, says economist

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PETALING JAYA: Bank Negara has been urged to consider a cut in interest rates to spur economic activity after a low growth rate of 2.9% was registered for the first quarter of this year.

Barjoyai Bardai, an economist with Universiti Tun Abdul Razak, said a reduction in lending rates would increase consumer spending as it would boost their disposable income.

Bank Negara could lower the overnight policy rate to stimulate economic activity, he told FMT.

The OPR, or inter-bank lending rate, influences consumer rates. “It is a tool used by Bank Negara to invigorate the economy,” he told FMT. “When our economy faces challenges, the OPR is lowered to stimulate activity.”

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