PETALING JAYA: Malaysians have voiced their concerns over Bank Negara Malaysia's (BNM) decision to increase the overnight policy rate (OPR) by another 25 basis points (bps) to 2.25%.
Many social media users were frustrated, pointing out that this move was expected, while some claimed that a recession is coming.
"With the rise of OPR, it means the cost of borrowing is increasing. Borrowers like you and I need to pay more for our monthly instalment," Teh Eng Scze wrote.
Meanwhile, Ok Leong questioned the move by BNM.
"(Government) says (the) economy is good and inflation is low, but still raises the interest rate.
"The people are already (burdened) by the rise of goods and now our own government is looking to add salt to pain," he lamented.
CK Ng chimed in, asking if the OPR keeps increasing, would it affect the property and real estate market at the moment.
Facebook user Daniel Martin Sebastian commented that the OPR projections were 2.50% by end of 2022, and 3.00% by end of 2023.
"The overnight policy rate (OPR) is the minimum interest rate charged amongst banks in the interbank market, in which they borrow funds from each other. When a bank has a fund deficit to meet the withdrawal demand from depositors, the bank will borrow from another bank with an excess fund," he said.
Another Facebook user Andrew E. Lee wrote "BR (base rate) will eventually be 3.00% (per annum)."
Meanwhile, Alfancis Augustine asked if BNM is implying that the economy is recovering.
"When Malaysia's economy is considered good, the OPR is between 3.25% and 3.50%... When Malaysia Economy is not so good, the OPR is around 1.75% and 2.00%.
"So, in a weird way, (is) BNM saying our Economy is recovering?"
In May this year, BNM’s Monetary Policy Committee (MPC) decided to raise the OPR by 25bps to 2% from 1.75% in July 2020.
In making the announcement of the new OPR rate this evening, the central bank added that the ceiling and floor rates of the corridor of the OPR are correspondingly increased to 2.5% and 2% respectively.
"Amid the positive growth prospects for the Malaysian economy, the MPC decided to further adjust the degree of monetary accommodation.
"This is consistent with the MPC’s view that the unprecedented conditions that necessitated a historically low OPR have continued to recede," it said in a statement.