Malaysia slashes rates as exports flag

Bank Negara Malaysia surprised markets on Wednesday, slashing its key rate by 75 basis points to 2.5%.

The majority of analysts had expected a quarter-point cut, but a significant minority forecast a 50-basis-point lowering.

The central bank also cut its reserve requirement from 3.5% to 2%, effective from 1 February.

The central bank's cut came on the back of a further fall in inflation and signs that the recession in the major industrial economies was impacting export earnings.

"The sharper