Bank Negara raised the OPR

Salam and dear all,

Reference: earlier posting 30^th July 2009.

• Bank Negara Malaysia has, on 4^th March 2010, raised the OPR (Overnight Policy Rate) to 2.25% (from 2.0%). The move suggests that Malaysia is indeed easing out of the recession.
• Consequently, there is a potential that commercial banks may soon increase their BLR.
• What is OPR? OPR is the rate of interest that banks and other financial institutions lend money they have and deposited with the Bank Negara overnight to other banks and financial institutions. The interest rate, otherwise known as OPR, is 'controlled' by Bank Negara. The consequences of the changes in the OPR would normally include changes in the BLR, other costs of borrowing money (short-term interest rates, fixed deposits, long-term interest rates) and other events in the economy including employment, output, and prices of goods and services (http://www.realestateagent.com.my, 4^th March 2010).
• What is BLR? BLR is the minimum rate of interest determined by banks and other financial institutions. The BLR is based on factors including the banks' cost of funds and other administrative costs (http://www.realestateagent.com.my, 4^th March 2010).

Wassalam.