Bank Negara has cut its statutory reserve ratio (SRR) today by 100 basis points to two percent, releasing RM30 billion into the banking system, as the economy grapples with a coronavirus outbreak and plunging oil prices.

The cut takes the SRR, a financial tool used by Bank Negara to manage liquidity, to its lowest since the global financial crisis in 2009, when it was brought down to one percent.

The cut is the second in four months, and it comes just weeks after the bank slashed its key interest rate to 2.5 percent, its lowest rate in 10 years, to soften the blow from the virus to Malaysia's exports and tourism.

Until March 31, the central bank said, it would also allow each principal dealer to recognise up to RM1 billion ringgit in Malaysian government bonds, as part of compliance measures with the statutory reserve ratio.

"These combined measures will release approximately RM30 billion worth of liquidity into the banking system," Bank Negara said in a statement.

On Wednesday, Malaysia adopted curbs on travel and business to rein in a spike in virus infections, which totalled 900 today. The Health Ministry has linked more than half to a mosque gathering of 16,000 people in Sri Petaling, Kuala Lumpur.

The restricted movement order will run till the end of this month, but could be extended if it does not halt the virus spread, the government said today. — Reuters