Ahead of the cut, only two out of 26 analysts involved in a Bloomberg poll had predicted that the rate cut would take place. Analysts are generally of the opinion that banks will be the biggest losers as a result of the rate cut, although they say the impact is likely to only be short-term. It noted that the rate cut last year did little to alter loan growth momentum. On the contrary, MIDF Research expected the impact of the rate cut on banks’ earnings and full-year net income to be muted - based on previous trends. MIDF Research said the rate cut should be positive for underlying auto demand, but expects sector earnings to be offset by a weaker ringgit as an implication.

Source: The Star January 24, 2020 00:11 UTC