blr up 25bp, fd up 10 - usually.

opr up 25bp, srr up 100bp... just guess...
blr will be 7% or above...

BLR become 7% above
many will die de leh.. i hope not..
cus u know la.. then few more months they will announce again increase SPR or others.. then BLR will increase again
i hope it increase bit by bit..

7%-2.2% = 4.8% still manageable

if BLR up to
9% or 10% - 2.2%= 6.8% or 7.8% then should be worried.

based on the chart (i forgot where i see b4 liao)
after 98... BLR never go up to 9 or 10..
stay within the range of 6.x-7.x
hope it won't go up too much lo..

If SRR being raised, we can see BLR-1.x%, instead of -2.2%.

OPR is 50:50 chance being raised, but SRR is the one has the highest possibility being raised further.
SRR level is simply too low.

---

Added on July 7, 2011, 2:22 pmMy view, around 7% or 7.+% should be peak.

Little possibility it being raised until exceed 8%, unless we have GDP 8-9% growth coupled with elevated inflation rate, which is unlikely at the moment situation or near future.

This post has been edited by cherroy: Jul 7 2011, 02:22 PM

i refer to 2.2% as I more concern about myself and those who bought in 2009/2010/2011

LOL. coz most of us borrow with high gear based on 4%-5% during the period.

SRR???

Mind explain red highlighted, I lost...

Wow.....

0.25% = extra 8000/mth int

Based on 4% rate, the monthly repayment would be a whooping RM128,000 per month

If the repayment period is 10 years, the loan amount would be ~13 Million

If the repayment period is 30 years, the loan amount would be ~26 Million

BIG EXPOSURE!!

Statutory Reserves Requirement, aka money that need to set aside by banks and hold on/by BNM SRR regulation.

It just means money that cannot be used to loan out.
For eg. bank has Rm100 deposit if SRR is 3%, only RM97 can be used to loan out to make money/profit.

So higher SRR means higher cost to bank, so they may not able to give more discount on BLR.

thanks for the explanation..
i didnt know those SRR OPR etc etc
at least now i know SRR
been googled... but can't understaand..

I think the above is correct.

Definition: Statutory Reserve Requirement is a monetary policy instrument available to Bank Negara Malaysia (BNM) for the purposes of liquidity management. Effectively, banking institutions namely commercial banks, merchant/investment banks and Islamic banks are required to maintain balances in their Statutory Reserve Accounts (SRA) equivalent to a certain proportion of their eligible liabilities (EL), this proportion being the SRR rate.

This post has been edited by prody: Jul 8 2011, 09:17 AM

got example? i think with example will be easier for us to understand.. i googled also came out that.. end up i duno what it means.. english bad

haha....this guy really "man sheng zhai".... i oni know total loan amount of him around 30m++

of course, the money not oni for the property....oso for he's 3 company + Investment.

Thanks Cherroy! Learned something.

SRA/EL = SRR

SRA = Statutory Reserve Account
EL = Eligible liabilities
SRR = Statutory Reserve Rate

This is correct:
Let's say the bank has 100 RM in deposits, assets (EL), with SRR of 1%, they need to deposit 1 RM with central bank (SRA) , then can loan out the rest
Let's say the bank has 100 RM in deposits, assets (EL), with SRR of 2%, they need to deposit 2 RM with central bank (SRA) , then can loan out the rest.

This is wrong:

Let's say the bank holds 100 RM (SRA), with SRR of 1%, they can loan out 10,000 RM (EL).
Let's say the bank holds 100 RM (SRA), with SRR of 2%, they can loan out 5,000 RM (EL).

This post has been edited by prody: Jul 8 2011, 09:23 AM

wooo... ic... thanks for that
the higher the SRR.. the lesser the bank can give out loan..
if like tat.. bank will tighten the lending..
what if

Let's say the bank holds 100 RM (SRA), with SRR of 1%, they can loan out 10,000 RM (EL).
let say the bank already loan out 10,000 to other people
the next day Bank Negara raises SRR to 2% > bank can only loan out 5,000
they can just ignore it or they have to get more $$ so that the bank hold 200 instead of 100

OPR remained unchanged, but SRR inceased 1% to 4%.


i believe this is the correct answer

prody's first explanation (from the net) is something like an academic/formal answer to SRR, while cherroy gives an example to explain prody's explanation.

but prody's example is not correct. It is impossible that the banks can loan out money based on your formula.

This post has been edited by godutch: Jul 7 2011, 06:16 PM

OPR maintain at 3%

http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=2290

SRR up to 4%

http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=2289

So, do the blr increase or not?

i think will only hv a slight increase.

remember the last round when OPR increased 0.25%, SRR +1%, BLR increased 0.30%. increase in SRR increases cost of banks, so it all depends on how banks wanna recover the additional cost, maybe BLR-2.4% only for loan amt > RM500k ??? let's wait and see

Ref No: 07/11/03

Embargo: Not for publication or broadcast before 1800 hours on Thursday, 7 July 2011

Monetary Policy Statement

At the Monetary Policy Committee (MPC) meeting today, Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 3.00 percent.

The global economic recovery in the second quarter of the year was affected by supply disruptions arising from natural disasters and geopolitical developments, the impact of fiscal consolidation measures, the more uncertain conditions in the global financial markets and the higher commodity prices. Going forward, global growth will remain highly uneven across regions, with increased downside risks. For the region, growth is expected to be sustained by robust domestic demand, increased investment activity and intra-regional trade.

In the domestic economy, the latest indicators point to a moderation in growth in the second quarter, due primarily to slower external demand, greater than expected disruptions in the global manufacturing supply chain and lower than projected public sector investment. Private consumption and investment have, however, continued to be important drivers of growth. Going forward, growth is expected to improve, underpinned by continued strength in private consumption and private investment. This growth prospect however, could be affected by the heightened external risks.

Domestic headline inflation increased to 3.3% in May on account of higher food and fuel prices. Supply factors continue to be the key determinant affecting consumer prices with global commodity and energy prices projected to remain elevated. There are also some signs that domestic demand factors could exert upward pressure on prices in the second half of the year.

The MPC’s assessment is that the risks to inflation are on the upside. While the outlook for growth remains positive, there are heightened uncertainties arising from global developments that have created higher downside risks to growth. The MPC will assess carefully the evolving economic conditions and to the extent that the growth momentum is sustained, further normalisation of monetary conditions will be considered to safeguard price stability.



Bank Negara Malaysia
7 July 2011

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