OPR rise is a double edged sword. First of all, if we ask the average person what inflation is like for them, I suspect it will be much higher than the officially reported figures and government obviously knows this. But to control inflation it is necessary not to kill growth or we end up with stagflation and that takes a lot more sorting out. Raising OPR 'should' help to control inflation (and protect the exchange rate) but it needs to be done aggresively and quickly enough and often enough to have the desired effects on inflation whilst not adversely affecting the economy too much.

For these reasons, I can see a series of 0.25% or 0.5% rises to OPR and I do believe that we will see OPR at least at 3% by H@ 2023.

Ohk tq for the info..
Another question, will I able to fd more than once per account on 7.7 ?
I mean example 30k from affin for 1 fd, then 70k from diff bank for 2nd fd.

Should not be a problem having FPX FDs from different banks

Tbh I'm not sure if it's considered to be truly under control if it's all dependent on govt subsidies tho, especially when you account for the fact that we had the chicken supply fiasco due to govt's intervention in placing a ceiling price.

Feels like a battle between a bandaid for the short term vs tackling it harder for the long term, but ofc it's not easy to strike a balance given our relatively fragile economy as it is now.

Anyhow, is HLB really giving out 3% for FD tenures of 12 months? I thought it's only 2.9% for 1 year and 3% for 1.5 years with a minimum of RM10k placement. Or is there a different promo from what is shown here?

It's certainly not fully controlled but way better than the Europeans who are running into an epic disaster.

Agreed. Unfortunately Europe will have to raise bank rates considerably to fight its inflation battles and this will further weaken the Ringgit (causing import prices to rise in Malaysia) unless Malaysia also raises OPR by a similar amount.

Inflation is a global problem now. Some countries are affected more than others but higher interest rates are necessary just about everywhere.

Inflation this time is worsened by the war. Raising interest rates will not solve the supply shortage especially when demand is inelastic for oil and gas. The solution is for the US/NATO to reverse its sanctions and seek a peaceful solution. Unfortunately this will not happen as incompetence and pride is the hallmark of western govt.

I'm not going to go off thread and into the realm of politics but Ukraine has every right to defend itself and the West position is that if it doesn't help Ukraine fight Russia now it will end up very quickly having to fight Russia itself in Poland, Estonia, Latvia and Lithuania (to begin with) - at far greater human cost and global economic cost - including, of course, to Malaysia. No enforced peace deal will ever work as Russia will just be emboldened to try the same invasion tactic on its next target country.

As far as incompetence and greed of governments is concerned, let's just say that the West hardly has a monopoly on those qualities, does it!

Back on thread, the next BNM decision on OPR is due tomorrow and there may well be another rise. Let's just hope that decisions made at the next few BNM OPR meetings are effective in fighting inflation in Malaysia so we can all stop worrying about putting rice on the table. Hunger and poverty does not respect national boundaries and we should all remember that and be ready to help each other imho.

You may well get angry with me but honestly you need to get read more and get your facts right. For a start don't rely on western media sources

Yes, it is all much much more complicated. This RUS/UKR-crisis has a very long history, you need not to look back only to 1990 but to 1954. Nothing ever was so simple as the Westerners told us, Serbia, Iraq, ...

Not angry at all. I think you misunderstand my post. It is necessary to understand the position of all protagonists in order to reach a reasonably balanced point of view. I want peace as much as anyone but nobody can force Ukraine to accept a peace that would, in reality, be total surrender. Whether you or I agree on that is irrelevant. That is the Ukraine position.

Once again, back on thread. Do you think OPR will rise again tomorrow?

OPR will rise by 25 points I think!

I think so too. And it will be the first time in a decade that OPR has increased in 2 consecutive BNM OPR meetings. Most commentators are predicting another 25 point rise in September too. That would make OPR 2.5% and well on course for >3% in H1 2023. Good for net savers, hopefully it will control inflation but obviously not so good for those with loans at variable rates.

Malaysia gov so PROUD that doing subsidies can keep inflation low. But, what they don't dare to tell u directly (meaning u have to look at economic figures yourself, they won't dare to say in speeches) is how much more debts ALL of us Malaysians WERE FORCED to bear as a whole. Did u not see how much MORE debts as a % of GDP Malaysia has taken since 2000? It went from 30% to 70%. And gov wants me to believe that doing subsidies is good??

I want to repeat, subsidies ONLY benefit the few well connected smugglers who can sell to outside Malaysia for higher international prices. Let prices fluctuate. Higher prices will typically lead to more production (provided gov do not have restrictive policies like USA now has on oil n gas sector, i.e. throwing out fossils in the long run) and therefore stabilizing prices and hence inflation. As biz gets more profitable, gov taxes will increase, and gov can give handouts to the lower income group, which they want to help.

I heard alot of people saying the current inflation was caused by supply disruptions and raising interest rates will NOT help to lower inflation. But, please remember econ 101, price is the intersection of demand and supply. If raising rates can lower demand, the price at the intersection will therefore be lowered or remain the same if the supply got restricted further. Either way, inflation will cool off as the price (intersection) will be kept more or less at the same place.

Will that cause recession? Given the high job posting in angmoh land now, probably not yet.

0.25% is NOT good enough. Look at how badly the Australian dollar fared today when they raise by 0.5% (lower than the expected 0.75% angmoh will be expected to do later this month). If BNM really do only 0.25%, I expect Ringgit to go even lower. OMG, ALL of us will have lower purchasing power.

Savers have been penalized for YEARS, even with these rate hikes they are not really getting compensated much. As for borrowers, they have had YEARS of cheap money; so, stop complaining.

its quite easy to me. i have many Ukrainian friends. i ask them, do you want to be part of russia? answers no. also have many Russian friends. do you guys believe ukraine belongs to russia? in the context of the world now: nope.

nutshell.

I am a net saver so I am certainly not complaining. But I do feel for people who have big loans.

U mean big borrower has no idea or allowance in case of increase in loan interest rate before taking the loan? If no plan, then he will always eventually fail however lucky he is.

if you're referring to 7.7 1-day special promo rate 3.00%p.a. for 12mths....

you may want to read the t&c.

to be safe, better draw from banks with highest fpx limit first, in case your subsequent transfer not getting promo rate.

p/s: who knows, maybe hlb didnt enforce this either.

No, not at all, but not everyone has the luxury of choice in the matter you refer to. I would not feel much sympathy for anyone with a loan for an expensive car for example. But if it was for a mortgage on their only (modest) property which provided a home for them and their extended family then I would have sympathy.

I also agree with your sentiments that returns have been poor for savers for several years now and it is only fair that FD rates and general Returns On Investment should now increase substantially.

This post has been edited by MattSally: Jul 6 2022, 07:34 AM