Bank Negara to issue consultative paper on new reference rate that will replace BLR

Bank Negara says the proposed changes in the reference rate framework will not have an impact on effective lending rates charged to retail borrowers.

PETALING JAYA: Bank Negara will issue an industry consultative paper to the financial industry on a new reference rate framework to replace the base lending rate (BLR) regime quoted by financial institutions in the pricing of retail loans.

The central bank said in a statement that under the proposed framework, the new reference rate would be determined by the respective financial institution’s funding costs, which reflect its specific funding structure and strategy, and the statutory reserve requirement.