Bank Negara may raise rates by 0.25 in Jan 2023.
The Federal Reserve announced a 50 basis point interest rate hike in the early hours of December 15, Malaysia time, as everyone expected, and Bank Negara Malaysia may also announce a rate hike in its mid-January meeting.
The Federal Reserve (FED) announced the latest December interest rate resolution, raising rates by 50 basis points as planned, and the current federal interest rate is 4.25% to 4.50%. The Federal Reserve predicts that interest rates will continue to rise by 75 basis points in 2023.
The interest rate may be 5.10% at the end of 2023, and it may begin to fall to 4.10% in 2024.
The Federal Reserve continues to raise interest rates, and Bank Negara Malaysia must follow suit and raise rates once more. Bank Negara increased interest rates four times in 2022, from 1.75% to 2.75%.
Bank Negara will hold its Monetary Policy Meeting (MPM) on January 19, with a 25 basis point rate hike very likely. The Overnight Policy Rate (OPR) will be 3.00% if Bank Negara raises rates by 25 basis points in January.
When the National Bank raises interest rates, the loan interest rates of various domestic banks rise in lockstep. If you have a mortgage, you must increase your monthly payments. If you submit a new car loan application, your interest rate will rise.
However, Bank Negara’s interest rate hike benefits depositors, which means that domestic banks will raise interest rates on time deposits after Bank Negara raises rates. Fixed deposits up to 4.50%p.a. are now available, and if Bank Negara raises interest rates again, 4.75%p.a. fixed deposits are just around the corner.
