Hanoi (VNA) - Malaysia'scentral bank on July 7 reduced its interest rates to a record low to fight theimpact of the COVID-19 pandemic, and warned that the pace of economic recoverywas uncertain.

Bank Negara Malaysia (BNM) cut itskey rate by 25 basis points to 1.75 percent and warned that the Malaysian economyhad contracted sharply in the second quarter of 2020 because of the strictlockdown. This is the fourth consecutive time the central bank has lowered itsinterest rates.

The bank said in a statement thatbusiness activities have been recovering and that the
government’s stimulus packages willcontinue to underpin the improving economic
outlook.

However, the pace and strength of therecovery remain subject to downside risks, including future outbreaks and a weaker-than-expectedrebound in global growth, it added.

Southeast Asia's third-biggesteconomy has been largely dependent on trade, and its key exports include palmoil, crude oil and natural gas.

Most businesses were closed andpeople were forced to stay at home since mid-March as the outbreak accelerated,although authorities have been easing curbs since early May and life isgradually returning to normal.

The country's outbreak has been smallas it has recorded about 8,600 cases and 121 deaths, but the lockdown isnevertheless believed to have cost the economy billions of dollars./.