Interest rate or overnight rate (OPR) is set by BNM and controlled by respective central bank.

How bond pricing or yield generally (if do not move too drastically) generally won't affect the overnight rate, unless central bank is powerless to control the movement.

Aka if your interest rate too high, massive hot money flow in causing currency shooting drastically
or
interest rate too low vs bond pricing, massive outflow causing exchange rate plummeting like 97.

In this situation only the market force can force central bank to act.

But since 97, capital market is not as open and free like last time, aka no limit, no control on how money being TT out/in etc,
, so a good capital control measurement can reduce this kind of issue.

Since 2008 crisis, we can see a free and open movement of capital can cause more harm than good.

That's why Malaysia can have 3% while US interest remain at zero, and there is no massive hot money pouring in, causing RM to shoot up to the roof.

Yes, impact will be there, but if local liquidity is enough, and domestic economy condition is intact, it shouldn't cause any major issue.

That's why I do not see how BNM can opt to hike in interest rate, particularly GDP number is becoming less and less, last month export is shrinking, IPI is weak. And many businesses out there already complain sluggish sales.

Domestic interest rate is to cater domestic economy activities, this is the primary function of the interest rate.

I do not think it is right to say Banks are not allowed to raise FD interest rates  without a change in BLR or OPR.

Banks in fact have lower - 1 to 2 % BLR loans to properties borrowers.

LIkewise , Hong Leong comes out a FD innovation to attract long term depositors (  6 years )  , more or less expecting FD interest rates  to rise in the future.

I don't mean bank is not allowed or allowed.
Banks are always sensitive to interest rate movement.

The moment they expect rate to go up, we may see many bank start offering 1,2 or 5 years FD with rate higher than normal (or short term rate) that intend to lock down the customer deposit rate already.
Just like if current rate is 3%, and they expect to be 5% in the coming few years, banks may start offering long term FD with 4% or something like that to lock down their deposit rate.

With now 1 year common rate out there is 3.1% (not those promotion rate, as many promotion are limited to certain amount, aka bank just want to take in x millions deposit for their liquidity or cash position etc then cease the promotion already) as compared 3% OPR, it doesn't suggest bank see OPR going to be raised for sometimes or near term.

David's red horse ada jalan ?

David's red horse ada jalan ?

5207 suddenly up 9.6% today..................sharks hidden everywhere, whether we know to dig it or not

Yr Company 

nothing related to me.................just in my watchlist due to low PER

cenbond anyone

I guess most of the sharks are the "offload mood" aka push up and dump ,  like Luster yesterday

agreed............market sentiment always the factor of the sharks change their mind

Well,  for those sharks who still hold large volume of stocks, worry about Fed Ben too.

No certainty of attracting ikan bilis back one.