Thursday, July 30, 2009
Interest rate stays at 2%
Salam and dear all,
It has been reported that Bank Negara Malaysia (BNM) is maintaining its benchmark interest rate at 2%.
1. What is benchmark interest rate? The BNM's benchmark interest rate is the basis for banks in Malaysia to decide on their lending rates.
2. In addition, BNM also reported that the country's economic situation is improving with indicators such as industrial production index and retrenchment of worker showing a slower rate of decline.
3. Furthermore, factors such as the government's stimulus package, lower costs of borrowing, lower rate of inflation are indicators suggesting that Malaysia's domestic economy is improving.
4. In the context of the construction industry (specifically on procurement) with the benchmark interest rate staying at 2% the costs of construction (business) remained low and demands for property might pick up.
Wassalam.
Source: http://biz.thestar.com.my, 30th July 2009.
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2 comments:
Salam
Sir ca you explain more on how the interest rate will effect directly on the construction industry. Whether, it will give more confident to financial institution to lend their money or to the public ie the industry player to gain their oppoturnity in the mean time. Hope for your assistance.
thank you and waSalam
Arif Othman
0431775
Salam Mr Arif Othman,
There are costs when businesses borrow money, interest being one of them. When interest rate is low, this element of costs is therefore cheaper than during times when the interest rate is higher than say the current BNM's benchmark of 2%.
Please refer to course AQS1250 or else see me for further discussion.
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