BLR reduce as mentioned by the media will take effect soon. This is a good way to use it as platform in reduce loans monthly repayment if you may have.

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ALL commercial banks will take immediate steps to reduce the monthly loan repayments for facilities with interest rates pegged to the base lending rate (BLR).

This is to help borrowers in the current challenging environment, the Association of Banks in Malaysia (ABM) said in a statement today.

The move came in the wake of the announcement by Bank Negara Malaysia yesterday that its benchmark overnight policy rate (OPR) will be reduced by another 50 basis point to 2 per cent from 2.50 per cent.

The new BLR will be published by the banks individually in the days ahead, similar to cases of the previous rounds of OPR cuts in November 2008 and January 2009, ABM said.

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Popularity: 9% [?]

MALAYSIA’S central bank cut its key rate by 50 basis points to 2 per cent on Tuesday due to rising concern about the country’s economic growth.
Bank Negara Malaysia also cut the commercial banks’ statutory reserve requirement by 100 basis points to 1 per cent effective March 1.
This was the third straight rate cut in as many meetings and came after a shock 75 basis point cut in January.
Six out of 13 polled economists predicted a rate cut of 50 basis points, while seven had expected no change in a Reuters poll. – REUTERS

Popularity: 5% [?]

In short, a definition for OPR (a.k.a. Overnight Rate in most countries) is regarded as “the rate that large banks use to borrow and lend from one another on the interbank market”. In Malaysia, the rate is regulated by Central Bank.

And, the movement of OPR will have direct and positive influence the movement of Base ‘.Lending Rate (BLR).

Since the OPR has been reduced, then soon the financial institutions will also reduce the BLR, and the people will enjoy a lower interest rate.

On the other hand, SRR is regarded as the minimum percentage out of the total deposit received that need to maintain by financial institutions.

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Overnight Policy Rate (OPR) history chart from 2005

As expected, Bank Negara Malaysia (BNM) kept the Overnight Policy Rate (OPR) at 3.5% after its Monetary Policy Committee (MPC) meeting.

Although the recent deceleration in inflation has restored “positive” real rates of returns to depositors, BNM’s monetary policy statement implies inflation may creep higher in the coming months due to “continued high prices of commodities and agricultural products, and the rise in global food prices…”

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Bank Negara Overnight Policy rate (OPR) being reduced to 2.50%, most of the banks adjusted the fixed deposit rate to 2.50% to 3.0%. However it seems that few of the foreign banks seems still have 3 percent interest, anyway you need to confirm with the bank whether the showed rate is not yet adjusted to reflect the changes of the OPR. Need to wait and see how big the reduction on the Islamic account dividend rate will be be.

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Popularity: 9% [?]