Bank Negara’s Monetary Policy Committee (MPC) has decided to increase the Overnight Policy Rate (OPR) from 2.25% to 2.50%, commonly known as an interest rate hike, according to a statement issued by Bank Negara.
The latest upper and lower limits of our overnight policy rate range from 2.25% to 2.75%, which has gradually returned to the pre-epidemic level.
In the message, the National Bank noted that global economic activity continued to expand, with signs of a slowdown in growth amid rising cost pressures and a strict embargo in China. However the improvement in the labour market and the reopening of most economic activities contributed to growth.
The sharp adjustment in US interest rates has created a strong US dollar situation, which has led to sharp volatility in financial markets, affecting other market currencies and emerging market currencies, including the RM. Looking ahead, global growth continues to face a drag from multiple factors, such as the tightening of monetary policy in most economies and China’s means of preventing and controlling epidemics.
With the announcement of a 25 basis point interest rate increase by the National Bank, interest rates on both home loans and fixed deposits will follow suit. If you have a home loan, then the amount you have to pay each month on your loan will increase. Borrowers are urged to check with their banks for the latest interest rates and monthly payments.
National Bank is expected to raise interest rates once more in November, i.e. 25 basis points, and the overnight policy rate will be 2.75% at the end of the year.
