Why is CIMB cutting its base rate by 25 basis points?

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CIMB is reducing its base rate by 25 basis points to support the Malaysian economy and align with Bank Negara Malaysia's monetary policy intentions.

CIMB Bank Bhd and CIMB Islamic Bank Bhd announced a 25 basis point reduction in their base rate and fixed deposit or fixed return income account-i board rates, effective March 9. This adjustment will also lead to a 0.25 per cent decrease in all financing facilities tied to the base lending rate and base financing rate. The move is intended to facilitate the transmission of monetary policy as directed by Bank Negara Malaysia’s Monetary Policy Committee.
Alignment with Monetary Policy Transmission

The decision by CIMB to lower its rates directly supports the monetary policy objectives set by Bank Negara Malaysia. By reducing its base lending and financing rates, the bank ensures that the central bank's policy rate changes are effectively passed on to consumers and businesses. This mechanism is crucial for influencing borrowing costs and stimulating economic activity in line with national economic strategies.
Economic Support Amidst Covid-19 Disruptions

This rate cut, occurring as the second Official Prescribed Rate (OPR) reduction in 2020, is specifically aimed at bolstering the Malaysian economy. The measure acknowledges the potential for extended disruptions to economic activities due to the Covid-19 pandemic. CIMB Group group chief executive officer Tengku Datuk Seri Zafrul Aziz highlighted that such actions are vital for economic resilience during uncertain times.
Expectation of Economic Growth and Stimulus Synergy

Tengku Datuk Seri Zafrul Aziz expressed optimism that the rate cut, when combined with the recently announced RM20 billion stimulus package, will foster conditions conducive to continued economic growth. The synergy between monetary easing and fiscal stimulus is expected to provide a more robust framework for economic recovery and support businesses in navigating the challenges posed by the pandemic.
Customer Assistance Through Financing Restructuring

Beyond adjusting its rates, CIMB is also extending support to its customers through the restructuring and rescheduling of financing facilities. This offers a practical measure to assist individuals and businesses in managing their financial obligations during the economic downturn, ensuring they receive necessary support to weather the current challenges.

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Why is CIMB cutting its base rate by 25 basis points?

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