BNM rate is not coorelated to Fed fund rate.
From 1998 to 2013, basically BNM rate was always in the range of 3.x% (apart from a year or 2 during 2008 crisis, that we saw OPR at 2%), while Fed fund rate was roller coaster from 1% to 4% then to now 0.25%.
Even many time Fed has reiterated Fed fund rate is going to stay low for extended period, despite QE tapering.

So, it is very unlikely for OPR to increase 3% to 6%, even in many years time.

Since 1997 crisis, Malaysia OPR never more than 3.x%.
Already 16 years at 3.x% level.

There is no reason for BNM to increase OPR to 6%, unless the economy is growing red hot at more than 8~9% rate just like what economy did before 1997 crisis.

If inflation is seriously hit or RM under pressure that forcing BNM to increase OPR to 6%, it just means property cannot be sold at dirt cheap price as well. Temporarily fire-sale due to those unable to service the home loan could surpress the property price for sometimes, but inflation will bring up the cost of property, aka property price in the longer future.
Just like a bowl of mee cannot be sold at RM2-3 nowadays like in old day.
Yes, property market could dampen due to correction, in fact, showing sign of slowing, but BNM is unlikely to hike so significantly to 6%.

It may kill the economy at 6%, which is not the interest of BNM to do so.
BNM want the property market to cool down, but not the economy, this can be seen by moves made by BNM of LTV ratio, tighter lending practice on home loan, but reluctantly to use interest rate as a tool to cool it down.

So the chance of increase 3% is remote for time being condition.
In fact with GST is on the pipeline 2015, that could dampen the economy growth, it is not the interest for BNM to hike rate so significantly.

Malaysia economy no longer like prior before 97.
Situation is totally different.

Prior before, you have low base, aka from agriculture to industrialisation, a lot of sector booming, good profit margin, corporate can withstand high funding rate (BLR) to sustain and grow the business.

Now Malaysia economy is on middle of the road, aka in the middle income range.
A lot of SME is on razor thin profit margin, no thanks to globalisation.
Higher interest rate can easily kill off them.

Gov expenditure no longer can go more due to persistent budget deficit over the last decade.
In fact, even with many subsidy cut recently, gov budget is still a deficit situation.

You need strong SME sector to propel the economy in a more healthy way. Cannot always rely on gov, unless the gov is cash rich, then different story.

Since after 97, certain capital control is still there, not as free as last time. Some capital control is indeed needed to have a more stablise environment.

As said before, Fed has repeatedly saying Fed fund rate is going to be low for extended time period.
So Fed may also repeat what Japan has been doing for the last 2 decades, low interest rate throughout.
Unless US economy become red hot.

So whether there is link between cost of fund of bank in Malaysia and Fed fund rate, it doesn't matter. Rate is going to stay low for some considerable time.

No link, there is no reason for BNM to raise rate unless economy growing strongly, which is unlikely with squeeze of disposal income for middle income people.

Link, Fed fund rate is highly to stay low for extended period of time.

Even there is need a move on upside, it won't be drastic as 3%, a 0.5 to 1% is considered a quite big and bald move as well.

You cannot have 8 to 10% interest rate while most countries on the world is on 0% interest rate.
Unless the economy situation of the country is not strong or healthy enough, whereby you need high rate to fence off inflation and capital outflow.
If not, you may attract too much liquidity (if there is no capital control), that fuel the bubbles in the economy.

Nowadays, it is a globalisation world, money can flow in and out with just a press of button.
We cannot use old day method or situation to assess fast moving financial world nowadays.

We need to accept that, a grow of 7~8% is a past, this figure is for low base and starting time. Once grow and develop up to certain scale, the pace will drop. To grow per capital income from RM1000 to RM10000, can be fast and easy, but to per capital income from Rm10,000 to Rm100,000 is more difficult and at slower pace.

Fed has been saying rate will stay low for extended period, so I do not think a 3% of incremental even over the 3-4 years period can be seen.

Fed want to see some inflation at around 2%.

With 10 years treasuries approaching 3% after tapering news, the rate is about on par with Malaysia OPR.
In fact previously due to QE, there is massive flow of money to Asian region, which one of reason property price sky-rocketing, asset price inflated across.

Japan low interest rate is not the culprit of deflation, unrelated.
The deflation suffered by Japan is due to multiple factors.
Previous 80's giant real estate bubble become too big and burst, lack of large scale of revamp of banking sector, aging population etc.
The deflation has nothing to do with low interest rate.

As said before, unless the economy is red hot and growing robustly, there is remote chance for rate to increase as much as 3%.

My view,
0.25% to 1% depended how GDP and unemployment rate.

One may say it is a negative interest rate, but currently Fed and central banks around the world is pro-growth instead hawkish on inflation.
They generally more about deflation than inflation, as long as inflation is not running out of control.

I would agree on this, the most rate may be hiked at current economy situation, highly won't more than 0.5%,
especially with GST in the pipeline.

As said before, the negative interest rate is not the reason why Japan in deflation.

Low interest rate /= deflation.

Negative real interest rate only hurt saver.
US is not known for high saving rate.

US population condition and culture of spending is not the same as Japan.
In fact, US economy already show pretty good number across.
Latest Q GDP is 4.1%, which is a very good number.
Stock market all time high.
USD show strength.
US corporate earning is improving.

Yes, we can look back after 3 years.

In fact, many posts and topics in this forum are more than 4-5 years.

This thread has over-reaching 125 pages generally recommended.
So please start a V2 if wish to continue.
Ty.