How Bank Negara’s reduction in overnight policy rate affects Malaysians’ pockets — Hann Liew
PublishedMAY 8 — Bank Negara Malaysia’s Monetary Policy Committee announced yesterday a reduction in overnight policy rate by 25 basis points, from 3.25 per cent to 3 per cent.
Banks in Malaysia will generally move their deposit rates and lending Base Rates in line with moves in OPR, so a cut in OPR will be generally followed by a cut in those rates, which means lower interest rates for both savings and loans. The following are some tips for Malaysians to get ahead, before banks begin rolling out this change to their consumers.There are two considerations to make when thinking about loans in the face of this OPR cut. First, does the loan product have a variable or fixed rate? Second, are you an existing borrower or are you looking to borrow in the near future?
As a result of this OPR cut, we expect home owners with existing loans to be paying roughly RM20 less on their monthly installments for every loan amount of RM100,000, once the changes are reflected onto the banks’ respective Base Rates.Conversely, a lower OPR and subsequent adjustments in banks’ own internal rates, means lower interest rates on savings products such as current and savings accounts, and fixed deposits when the banks start rolling out new rates.
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