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achee
01-12-2005, 07:59 AM
Read this in the newspaper, and does it mean our BLR will shoot up too?? Can someone tell me what it means by Overnight Policy Rate.

http://www.thestar.com.my/news/story.asp?file=/2005/12/1/nation/12744488&sec=nation

Interest rate up

KUALA LUMPUR: Interest rates are set to move up for the first time since 1998 after Bank Negara raised the benchmark overnight policy rate (OPR) by 30 basis points to 3%.

Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said the decision to raise the OPR, which influences lending and deposit rates offered by banks in the country, was made after the economy grew strongly during the third quarter and is expected to maintain the momentum heading into next year.

“In the second quarter, we indicated that the risk of slower growth and higher inflation was about in balance. However, with the economic numbers for the third quarter, we believe the risk of slower growth has now diminished and the risk of higher inflation at the current levels still remains,'' she told the media yesterday.

Zeti expects some adjustment in deposit rates following the rise in the OPR.

She made the announcement after revealing that the country's economy grew by 5.3% in the third quarter of this year.

Higher interest rates will mean that loans that are pegged to the base lending rates of banks will become costlier, but it will also see depositors gain in terms of higher interest rates.

Standard Chartered Bank Singapore regional economist Joseph Tan believes banks may not immediately raise their lending rates as there is still excess liquidity in the banking system. He, however, expects lending rates to eventually move higher should the central bank continue to push up the OPR.

“Margins at local banks are still healthy and they can absorb this first increase,'' he said.

monster
01-12-2005, 09:08 AM
looks like would be paying more monthly for my house loan :(

bet the increase in interest rates for deposits will not be in proportion with increased BLR.... guess which increase more....

totoro
01-12-2005, 09:41 AM
if you wish, you can still refinance to fixed-rate loans, or current bank loan promotions, such as AIA/ING's 5.89% fixed-rate promotion... or SBB's 5.3% for 1st 2 yrs, BLR-0.70% thereafter...

banks will eventually raise their BLR, but not so soon. FD rates will go up though.

orchipalar
01-12-2005, 09:50 AM
Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz said the decision to raise the OPR, which influences lending and deposit rates offered by banks in the country, was made after the economy grew strongly during the third quarter and is expected to maintain the momentum heading into next year.

Err...the economy grew?...geez...fuel n utility costs are rising...inflation rate n costs of living are rising...unemployment rate is rising...n now interest rates on rising borrowing...goes UP...!!...what a great news that is...:rolleyes:

Yourdadisangry
01-12-2005, 11:36 AM
thank goodness I made the right choice on fixed rate for my housing loan... wonder what it gonna be if I chose that BLR thingy.... :eek:

cherry
01-12-2005, 01:32 PM
[COLOR=BlueErr...the economy grew?...geez...fuel n utility costs are rising...inflation rate n costs of living are rising...unemployment rate is rising...n now interest rates on rising borrowing...goes UP...!!...what a great news that is...:rolleyes:

As you can see Malaysian Government are really bad when it comes to statistic... Just like the immigration figures :p

Zimon
01-12-2005, 05:20 PM
Sometimes I wonder if those figures released by bank negara are "correct" .
Where does these figures comes from, what compromise the figures, how accurate are these figures ? If you have seen some of those questions posted on the statistical forms given out by the statistics dept. (some of us have to fill them up) Its really taxes the mind to understand what they want and what I have to give, so I just give lah. I know some doctors too have to do it and the short cut is, the docs ( too busy for this ) gives rm20 to the guys (who brought in the forms) to fill it up. Having said that, those figures may or may not represents the actuals... garbage in = garbage out. :confused:

Bank negara claimed =Third qtr grew 5.3% ???? Huh !! I rather accepts Orchi's comment on post #4 as a more realistic picture of the economy. :p