Bank Negara increases OPR again by 0.25% – now at 2.5%; 3rd hike this year; expect car loans to be costlier

Bank Negara increases OPR again by 0.25% – now at 2.5%; 3rd hike this year; expect car loans to be costlier

The monetary policy committee (MPC) of Bank Negara Malaysia (BNM) has decided to increase the overnight policy rate (OPR) again, this time by another 25 basis points (0.25%) to 2.5%. This is the third time the OPR has been raised this year, with the previous two hikes – each seeing an increase of 0.25% – happening on July 6 and May 11.

In an official release, BNM said that inflationary pressures have remained high because of elevated commodity prices and tight labour markets, despite continued easing in global supply chain conditions. “Consequently, central banks are expected to continue adjusting their monetary policy settings, some at a faster pace, to reduce inflationary pressures,” said.

The year-to-date, headline inflation is currently at an average of 2.8% and BNM says it is projected to peak in the third quarter of 2022 before moderating thereafter. Meanwhile, underlying inflation, as measured by core inflation, is expected to average closer to the upper end of the 2-3% forecast range this year.

As reported previously, an increase in OPR will have an impact on a bank’s interest rate for borrowings. This could result in increased hire purchase rates, which would make it more costly for car buyers. More than that, banks may be more cautious when it comes to approving loans as historical data shows a co-relation between the OPR and average approval rate for car loans – higher OPR, lower approval rate.

If you’ve placed a booking for a new car recently and decided to take on a loan to finance it, did you manage to get your loan approved? What was your chosen model and the interest rate offered to you? Share your experience in the comments below.

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Gerard Lye

Originating from the corporate world with a background in finance and economics, Gerard’s strong love for cars led him to take the plunge into the automotive media industry. It was only then did he realise that there are more things to a car than just horsepower count.

 

Comments

  • newme on Sep 08, 2022 at 5:09 pm

    In the meanwhile …

    “kami nak keluarkan duit titik peluh kami. Ni duit kami, bukan duit kerajaan. Kami terkesan dengan harga barang mahal”

    “Nak tunggu tua, tak dapat merasa duit kami sendiri”

    “Tua nanti pandai-pandailah kami nak jaga sendiri. KWSP jangan sibuk”.

    “Setuju”

    “Setuju sangat”

    Like or Dislike: Thumb up 9 Thumb down 5
  • Good news for PNB investors.

    Like or Dislike: Thumb up 5 Thumb down 0
  • Dong Gor on Sep 08, 2022 at 6:24 pm

    I think BNM is being very conservative… 0.25 each time. We need 2 more hikes to get to pre covid interest rate. Not a professor in economy but low interest rate really hurting a lot of retirees…

    Like or Dislike: Thumb up 10 Thumb down 2
  • Copy Paste on Sep 08, 2022 at 6:38 pm

    Copy paste: “Realistically we cannot avoid a price hike, not when the world is selling petrol at RM 4.30 per liter when we are giving out at RM 2.05/l. The world is facing 11% inflation while we here complain when it is at 4%.

    We must face reality.

    Long term it is unsustainable and Opposition troopers & politicians should not stir anger with rakyat when eventually the hit comes because it is unavoidable. At least Gomen now will delay the hike at least until after GE15 so we can be a lot thankful for the reprieve in this moment.

    Rather than be wasteful and complain here, lets think of ways to boost our income, lower our expenditures, control our desires to own the latest cars or latest phones or latest gadgets, or save money whereever we can – a little here and there goes a long way- plus invest that money, good investments not those get rich quick scams, living a moderate lifestyle without excesses and no need to be envious of the Jones with nice cars and overseas holidays.

    In the end we should not and cannot blame the Gomen for hiking prices as this is real world facing us. Trying to molly coddle with artificial low prices will hurt in long run.

    We need to face the harsh reality of this world we live in today.”

    Like or Dislike: Thumb up 12 Thumb down 4
  • Bieight8 on Sep 08, 2022 at 8:09 pm

    Just buy in cash…

    Like or Dislike: Thumb up 2 Thumb down 2
  • Civic Turbo 2018 on Sep 08, 2022 at 9:39 pm

    Goood! Punish those spending by loans
    Then our economy will grow stronger
    So no targeted fuel subsidy soon

    Like or Dislike: Thumb up 4 Thumb down 0
  • Ben Yap on Sep 08, 2022 at 11:12 pm

    more bankrupts coming soon. well, government can lower the bankruptcy rate by increasing the bankrupt threshold.

    Like or Dislike: Thumb up 3 Thumb down 0
    • Thank god on Sep 12, 2022 at 8:00 pm

      What bankrupt? You see malls fine dine and high end coffee hse all full. Queue so long. Especially female damn rich, all dine fine dine, insta worthy restaurant and cafe. Last week I dined in a fine rest located 50th floor facing KLCC with a carbonara spagetti costing RM90 plus, and a steak at RM500 guess what? Full house. Young men and girls all in their early 20s. Poor? Nahh..But then, I actually went up with them because that is session lunch, They all drive Myvi, Jazz, Saga, and greatest is civic. They can really spend. Haha I drove my Porsche Cayman, and their gf look at me like no bf by their side. I went alone, thats my usual rest to go weekend to meditate and gain silent but its damn noisy now. I think I can easily grab those girls if I want looking at the way those girls looking at me. Oohh.. im young, at 26, Im rich i didnt go uni i start business at 19 frm lottery money. Thank god so much.

      Like or Dislike: Thumb up 1 Thumb down 1
  • Hustler on Sep 16, 2022 at 5:51 pm

    Young folks in Klang Valley these days easily earn rm20k. Just stay with fam dont move out. A few months later buy car with cash. Easy.

    Like or Dislike: Thumb up 0 Thumb down 0
 

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