OPR cut to 2.75pct prudent, proactive measure
Prime Minister Anwar Ibrahim said the Monetary Policy Committee's (MPC) move was based on careful assessments of current economic and inflation forecasts.
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Malaysian Reserve
2 hours ago
- Malaysian Reserve
Short-term rates seen steady next week on BNM operations
SHORT-TERM interbank rates are expected to remain steady next week, underpinned by Bank Negara Malaysia's (BNM) continued operations to absorb excess liquidity from the financial system. This week, the central bank intervened daily by conducting reverse repo tenders, overnight reverse repo tenders, and Islamic reverse repo tenders to reduce excess funds in the financial system. On a weekly basis, surplus liquidity in the conventional system declined to RM20.30 billion from RM23 billion last Friday. In the Islamic system, surplus liquidity rose to RM33.69 billion from RM27.90 billion previously. The Malaysia Islamic Overnight Rate (MYOR-i) stood at 2.75 per cent as of July 10, 2025. — BERNAMA
Borneo Post
3 hours ago
- Borneo Post
Sheda advisor: Interest rate cut offers relief, but property market needs more than just OPR reduction
Dato Sim Kiang Chiok KUCHING (July 12): The lowering of bank interest rates is generally a positive move for cost-of-living relief, particularly for those with housing, personal, or business loans, said Sarawak Housing and Real Estate Developers' Association (Sheda) advisor Dato Sim Kiang Chiok. He said the reduction eases monthly repayment burdens and could free up disposable income at a time when households are grappling with rising expenses due to the expanded Sales and Service Tax (SST) and ongoing subsidy rationalisation. Sim was commenting on Bank Negara Malaysia's (BNM) decision to reduce the Overnight Policy Rate (OPR) from 3.00 per cent to 2.75 per cent. 'For businesses, it helps reduce financing costs and preserve cash flow in a slower growth environment, but this comes with a trade-off. 'Savers, particularly retirees or individuals dependent on interest income, will see lower returns on fixed deposits and savings accounts,' he said. 'As such, while borrowers benefit, those relying on passive income from savings may feel financially strained.' The BNM decision to reduce the OPR from three per cent to 2.75 per cent is a strategic, preemptive step to support domestic demand in the face of rising global and domestic uncertainties, Sim said. 'While Malaysia's economy continues to grow, there are clear signs of softening in certain sectors, particularly property, where Q1 2025 data showed a 6.2 per cent drop in total property transactions and an 8.9 per cent fall in value, according to the JPPH report.' 'Coupled with external pressures such as the recent increase in US tariffs on Malaysian exports (from 24 per cent to 25 per cent), weakening ringgit, and rising cost of living due to the expanded SST and the impending targeted RON95 fuel subsidy in Q4, the rate cut aims to preserve domestic consumption and support business sentiment. It is not a stimulus, but a timely cushion against downside risks,' he said. While a lower OPR may marginally reduce borrowing costs, its impact may be dampened by broader affordability challenges, Sim said. The Q1 2025 report indicates that even though construction and new launches remain active, residential property transactions also declined in volume and in value, pointing to a cautious buyer landscape, he said. For Sarawak, where household incomes are generally more modest and sensitive to inflation, the combined effect of higher SST, weaker ringgit, and rising living costs could offset the benefit of lower interest rates, he said. 'So, we may not see an immediate surge in first-time home buying unless additional supportive measures are introduced — such as reviving the Federal Government's 'My First Home Deposit' initiative or offering stamp duty exemptions for all residential property transactions.' Sim said Sarawak buyers tend to be price-sensitive and financially conservative. 'While interest rates do matter, income stability, employment security, and inflation expectations weigh more heavily on purchasing decisions.' He added that the recent dip in property transactions reflects that broader economic uncertainty, rather than interest rates alone, is shaping buyer sentiment. 'Sentiment in early 2025 has been mixed to cautious. After seven quarters of steady growth, the market experienced a correction in Q1 2025, as shown by the decline in transaction volume and value.' Sim said the OPR cut may offer short-term psychological and financial relief, but overall consumer confidence remains tempered by uncertainties surrounding global trade, the weak ringgit, and upcoming subsidy reforms. 'Therefore, while the rate cut helps support sentiment, more holistic interventions are needed to sustain demand, particularly in the residential market.' He noted that developers are unlikely to reduce prices significantly, as input costs remain elevated due to the SST expansion, higher logistics and compliance costs, and volatile prices for imported materials. However, he said some developers may respond by offering innovative financing packages, down payment assistance, or interest absorption schemes to attract buyers. 'There may also be a strategic shift towards smaller units and affordable housing, aligning with strong demand in the sub-RM300,000 segment, which accounted for more than half of residential sales in Q1 2025.' overnight policy rate property market Sim Kiang Chiok
The Star
4 hours ago
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Anwar meets leaders from seven countries
PUTRAJAYA: Datuk Seri Anwar Ibrahim held a series of bilateral meetings with senior leaders from seven countries, including China and Australia, where discussions centred around efforts to further strengthen ties. The meetings held at the Prime Minister's Office also involved representatives from Pakistan, Turkiye, Palestine, United Kingdom and European Union, who are here for the 58th Asean Foreign Ministers' Meeting and Related Meetings. On his meeting with China's Foreign Minister Wang Yi, the Prime Minister said both sides discussed various aspects of Malaysia-China ties, which continues to be strengthened following President Xi Jinping's visit to Malaysia in April. 'We explored efforts to narrow the trade gap and expand cooperation in the port, liquefied natural gas (LNG), water, digital economy and green technology sectors,' he said, Bernama reported. Anwar also expressed appreciation for China's support of Asean's Five-Point Consensus regarding the situation in Myanmar, reiterating the importance of a peaceful resolution to the South China Sea issue, in line with international law, including the United Nations Convention on the Law of the Sea (UNCLOS). During his meeting with Australian Foreign Minister Penny Wong, the Prime Minister welcomed investors' interest in the smart manufacturing, digital economy, artificial intelligence and renewable energy sectors. 'Australia has also been invited to participate in the Malaysia International Halal Showcase (Mihas) this September, in line with the halal economy's vast potential as a driver of future cooperation,' he said. In a meeting with Pakistan's Deputy Prime Minister and Foreign Minister Mohammad Ishaq Dar, Anwar said discussions revolved around the upcoming official visit of Pakistan Prime Minister Shehbaz Sharif to Malaysia, during which several memoranda of understanding are expected to be signed. The two leaders also explored potential cooperation in agriculture, particularly in rice trade, and exchanged views on regional and global developments, including Asean-Pakistan relations and the issue of Jammu and Kashmir. Anwar also received a courtesy call from Turkish Foreign Minister Hakan Fidan, where he expressed interest in encouraging further investments in strategic sectors such as semiconductors, pharmaceuticals, digital and green economy, artificial intelligence (AI) and aerospace. On his meeting with the United Kingdom's Foreign Secretary David Lammy, Anwar said the discussion focused on enhancing cooperation across various areas, including investment, energy transition, education, climate change, defence, digitalisation and AI. 'I also welcome increased UK investments, particularly in the semiconductor and green infrastructure sectors,' he said. The Prime Minister, who also met Palestinian Planning and International Cooperation Minister Dr Estephan Salameh, said Malaysia continues to strengthen its role in supporting the Palestinian people, particularly in the recovery and reconstruction of Gaza. On his meeting with the High Representative of the European Union for Foreign Affairs and Security Policy Kaja Kallas, Anwar said Malaysia has reaffirmed its commitment to strengthening ties with the EU, which is currently Malaysia's fourth-largest trading partner, with total trade reaching US$47.93bil in 2024.
