OPR Rate Malaysia May 2022

OPR Rate Malaysia May 2022

OPR” stand for the overnight policy rate and it is the benchmark interest rate set by Bank Negara Malaysia.

The OPR rate is the rate at which bank can lend excess funds to another on an overnight basis, its a crucial tool used by central bank to manage and control monetary policy in the country.

Keys features

OPR influence economic conditions in the country, by adjusting the OPR the central bank can control the money supply, inflation and economic growth.

Any changes in the OPR rate directly impact borrowing and lending rate in Malaysia financial system, when the rate lower it becomes cheaper for banks to borrow from the central bank.

Lowering the OPR rate encourages borrowing and spending boosting economic growth and also to lower interest rates on loans and others financial product but conversely raising the rate makes borrowing more expensive which can help control inflation and economic overheating.

The Bank Negara Malaysia’s Monetary Policy Committee decides on any adjustments assessment of economic conditions, inflationary pressures, GDP growth and external factor like global economic conditions when setting the OPR.

Revised OPR rate

OPR rate has been revise by Bank Negara Malaysia to increase the Overnight Policy Rate (OPR) by 25 basis points to 2.00 percent on May 2022.

The ceiling and floor rates of the corridor of the OPR are correspondingly increase to 2.25 percent and 1.75 percent, respectively in its third Monetary Policy Committee meeting on may 2022.

Major Banks will effect a corresponding 25 basis point increase in their Base Rate and Fixed Deposit . Similarly, all financing facility base on the Base Lending Rate (“BLR”) and Base Financing Rate (“BFR”) will be increase by 0.25%. All rate changes will take effect on 18 May 2022.

Malayan Banking Bhd (Maybank) announce to revise upwards its base rate (BR) and base lending rate (BLR) by 25 basis points effective by May 13 while BR will be higher from 1.75% to 2.00% per annum while its BLR will be revise from 5.40% to 5.65% per annum.

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