lol.. so which one is correct ? i will prefer cherroy one..
since his one very easy
got RM100.. if 3% means the 3% of the total cannot be used
as for prody.. got RM100.. 1% = 10,000 2% = 5000
i cannot get the formula done~

BNM calculation looks the same: See Appendix 2

Bank Negara maintains OPR at 3%
Written by theedgemalaysia.com
Thursday, 07 July 2011 18:04

KUALA LUMPUR: Bank Negara Malaysia has maintained the overnight policy rate (OPR) at 3% at its Monetary Policy Committee (MPC) on Thursday, July 7.

In a statement today, Bank Negara said 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, it said.

For the region, growth is expected to be sustained by robust domestic demand, increased investment activity and intra-regional trade, said the central bank.

Bank Negara said that in the domestic economy, the latest indicators pointed 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, it said.

“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,” it said.

Bank Negara said 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, it said.

There are also some signs that domestic demand factors could exert upward pressure on prices in the second half of the year, it said.

“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,” it said.

it's like the example given by cherro ealier on.

SRR 4%, means banks must set aside (save with BNM) 4% of its eligible liabilities (see the link provided by prody for all definition of what makes up for banks' eligible liabilities), which a big portion consists of deposits from customers.

No increase likely on BLR.

But may be slight effect on BLR -x.x%.

---

Added on July 7, 2011, 11:42 pmhttp://www.bnm.gov.my/guidelines/01_bankin...ry_20090701.pdf
EL is deposit that bank get aka money that bank hold or borrow from.

It has nothing to do with bank asset, aka loan out.

You want to loan ouy, you must have money to loan out.
Commercial bank cannot create money out of thin air.

If bank has RM100, they cannot loan out Rm5,000.
They need to borrow in RM4900, be it in the form of attracting more deposit in, or borrow from interbank.

What if SRR is 0%?
Can loan unlimited?
Commercial bank cannot create money out of thin air.


This post has been edited by cherroy: Jul 7 2011, 11:42 PM

similar discussion in USJ forum, an interesting one as well.
over there mostly support the fact of bubble and no bulls there mostly bear.

http://www.usj.com.my/bulletin/upload/showthread.php?t=33052

PRIMA is coming in town.
This so call 1 Malaysia Home plan.
With the release of the house volume in market, i wonder what is the impact to the demand and supply of the housing.
Will it slow down the house price or maybe the trend will start to go down.

Can someone share some idea on this?

did hdp kill the singaporean private development prices or escalated it?

Thank cherroy!.

Learned something from u, really appreciated.

No wonder, in year 2006 (around that time) housing loan is BLR +1.xx%, in year 2008 BLR-1.90%

Year 2009 (worst time) BLR-2.4%, then in year 2010 BLR-1.80%, and now return to BLR-2.40% again.

This post has been edited by firee818: Jul 8 2011, 08:33 AM

http://biz.sinchew-i.com/node/49240

Good thing I'm not in financing.

I was always under the impression that banks can loan out much more then their deposits, so I thought it was because of this SRR.
Anyway, it's actually because of the "deposit creation multiplier". Bank gets a deposit. Then lends out most of the money. Then somebody else deposits the money at the bank again. Then bank loans out most of the money again etc. etc.

that's why we see a lot of saving campaigns have been launched by local banks since 2/3 years ago.

Many think bank just create number, add a few zero, like add a few zero on your account, already can. No money print number only.
Reality cannot. This is not computer game.

Only central bank can create money out of nothing.

Yes, commercial bank is the process of money multiplier, but it must be from deposit or the bank go out to borrow from interbank or any source of money aka you circulating the money to multiply it.

When bank loan you home loan 500k, they need to pay the 500k to the developer or properties seller already.

SRR will affect the cost of money of bank.
Reduce SRR mean more money being "freed" out which in turn, allow bank make more loan, more profit.
Increasing mean reduce the liquidity aka reduce the amount can be lend out.

So that's why we see plenty of deposit/FD promotion lately after SRR being increased, while when SRR being reduced or to 1% time during height of global financial crisis, there is virtually none deposit promotion going on.
Bank needs to attract more deposit to make the same amount of loan like previous.

The actual situation, bank can lend much more than the capital they have.

A bank may have 1 billion capital, but the bank can loan out 20 billion, because the rest 19 billion come from deposit of customer, or borrow from various source, interbank, bonds etc.

Bank still can lend out more than the deposit they have, as long as they have other source of capital like above mentioned, from borrowing source or source of money to fund the borrowing.

good threads... given no change on OPR and with the rise of SRR, wonder what next from the banks in term of home financing... FD% up, BLR-% stay @ -2.4% or down... or more creative packages bundling coming to lure buyers/investor

For those who have sapu since 2009 would have be a millionaire by today

It's time for me to SSS now

Nothing safer than money in our bank account

Wow, now only I know ... good info.

do you know what the banks do to your money when u deposit them?
do you know what is the consequence that happen to your money when banks do what they do?

I only know i will be suffer if no money to spend

New info, major city in Sarawak, single storey terrace price up to
RM 220k - RM 250K, previously (before 3/2011) RM 200K - 230K increased by another 10%.