Higher OPR & BLR for Malaysian

interest rate

Following Bank Negara decision to increase the overnight policy rate (OPR) by 25 basis points last week, banks have begun to raise their base lending rates (BLRs). Bank Negara last week increase the OPR from 2% to 2.25%. Bank Negara raised the OPR as the economy has improved significantly and returned to its path to recovery.

So far BSN, Maybank, CIMB Bank, Public Bank, Hong Leong Bank, RHB Bank, Standard Chartered & HSBC announced their interest rate hike by 25 basis points from 5.55% to 5.8%. Other banks are expected to announce their decision soon. On the bright side, the increase in OPR & BLR also will result in increase in the interest gain from saving account, current account and fixed deposit.

Due to this, end users will have to pay more on their loans or financing with the finnancial institutions. It seem that banks make decision very quickly when it come to raise interest rate but take longer time to reduce the rate when Bank Negara reduce OPR.

5 comments… add one
  • But luckily the BLR increased only 0.3% to 5.8%. It is still LOW. It suggests that Bank Negara knows that they have to increase the BLR (so that local financial institutions will be more willing to give out fundings/loans) but not too high until it kill the whole purpose: the economy recovery. I haven’t check how the stock market responded to it.

    • Yes, still low but I think it will keep increasing. I buy a house last year at BLR-2.3%. Still haven’t start to pay my first installment. Now, my monthly installment is going to increase or I can opt for longer loan tenure.

      As for the stock market, only banking shares increase, as they the one who gain the most.

      • Yes, it does increase our home loan monthly instalment. Mine too.

        I think that news is a good news to banking sector and thus their counters get attention from investors.

  • Ian is right, luckily the increment of base lending rate (BLR) is just a minor adjustment, doesn’t affect much on the housing loan monthly installment, still manageable.

    I believe BLR will increase again in 2010. Hopefully will not more than 6.75%

    • Yes, it is still manageable.

      I read somewhere that we expect to see more increase this year. In total the increase will be between 50 to 75 basis points.


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