Many home buyers may not be old enough to remember that once upon a time, OPR did climbed until 12%. I remembered clearly that my Fixed deposit was 10% and banks gave me a free TV for 2 years fixed deposit.

Fast forward to this day, OPR seems to hover around 3%++ while mortgage spread around 1%.

Most Malaysian will disagree that interest rate will go to 5-6% in the next 10 years.

That's because most of them are still in diapers when I made that FD placement decades ago.

What do you think? Will OPR double in 10 years?

This post has been edited by boyboycute: Nov 23 2023, 08:44 PM

During that time our inflation was 10+% and GDP growth was 10+%. During that time even used cars can appreciate significantly

Another ktard that don't understand economy but acting like one

Yes, >6%

This post has been edited by jojolicia: Nov 27 2023, 07:59 AM

never said never, everything is possible. If malaysia economic hit the right strategy and earn a lot money, economic growth very well, then increased OPR will happen again.

During Wawasan 2020, government want to swift malaysia economic from manufacturing industry to became service industry.

But due to lack of technology, education level, R&D, expertise, and etc, we are not actually doing very well on service industry. But now, Malaysia realised, our natural resource, strategy location, and size of land etc etc is most suitable for manufacturing industry, so for Malaysia madini government, and budget 2024, you can see government start to focusing back to developing manufacturing industry.

Its still unknown, but i believe if malaysia was manage by right government and right developing direction, our economic can be still growing. The full potential of malaysia's economic not yet reached, so i will said not thing is impossible. and i hope OPR can raise up to 6%+ like old time, it mean malaysia economic are very well, every people are living well also.

When tat happen.. we are same level like ruble, turkey lira, venezuela and etc...

So u pray tat wont happen

Next year OPR sure up. Just get ready.

Theoretically OPR is a tool bank negara to control economic inflation & deflation. But in reality it also a tool to control and balancing the malaysia ringgit currency, to defending US inflation / printing money etc etc.

But back to a normal economic, even its raised to 6% or more, but its only temporary and cant last forever or so long. As long there are not conspiracy theory from other county, or share crocodile manipulating share market / crypto currency crisis etc happen.

So theory ORP raise, its to encourage people more saving, less buying / leverage loan to buy things. Its mean majority people with ok work salary, they are actually enjoying good paying, good promotion of job, good business, earn more money, and keep saving less buying. Not it be a nice situation for malaysia?

A very good illustration, somebody really need to learn on how finance and economy work, so that no need to keep opening post jamming the forum whole day, old doesn't mean always correct if live until now also can't get the points.

Rise in interest rates doesn't mean many ppl will not be able to repay loan and bankrupt. Interest rate is an monetary tool for central bank to manage the economy, due to business cycle adjustment. interest rates can be raised when the economy is doing too well also (overheating and caused high inflation to happen soon), or simply because the country suffered stagflation like what happened in US in 1960-1980.

And agreed with you, as Malaysian I do hope that one day BNM can have a chance to raise OPR not because it need to defense MYR value or inflation rate getting out of hand again due to stagflation, but simply because our economy is doing too well so BNM need to take preemptive move to avoid the trend of inflation arise and getting out of hand. (Those who are in doubt can Google search and see how FED raised its rates due to strong economy growth to avoid return of high inflation during Bill Clinton's tenure)

Given current market sentiment, either rm will devalue further or bnm will raise loan interest rate.

Malaysia money devalue is not a bad thing. It's also a method to attracting foreign investment. And currency devalue is a life saver for Japan economic bubble crisis during 1970+-.

If BNM want to increase OPR just to defending RM value, then it will lead to economic depression. As now Malaysia economic just start recovery from pandemic, everything, job, business etc.

Doesnt matter OPR naik or turun...

Question is whether you have a balance of toilet paper or real money at the end of the day...

OPR can naik.. till kingdom come... but if currency is like toilet paper... you're still farked...

Remember... Keripstos 21mil BTC... is only this much now and in future...

can't say the same for ALL FIAT money... as long as nations has the power to print their own currency... whatever cash you hold will eventually go to ZERO!...

follow....
see joker make joke

That time Soros attack asian currencies. Tun reluctant to listen to World Bank thus he rather borrow from fellow Malaysians. Increase FD rate until 10% because no fucking elsewhere will you get 10% guaranteed. Luckily that time barang still murah and it works. Try it again today and I wonder how effective it will be. Inflation will be crazy.

I think the old man got lucky with it. Time has changed though...

Aiyoh yoh

Accidentally step on someone's tail.

Hopefully I live long enough to make that 10% FD again

Not just Soros, we and other SEA countries were like little fresh meat in the eyes of global big sharks, especially all big hedge funds and Europe and US giant banks, each of them got slaughtered us, and our financial system look so naive during that time in their eyes.

To me, Mahathir actually did not do anything impressive, despite he was called bapa pembangunan in SRJKC textbook, together with stupid wawasan 2020. Every country will experience high speed growth in initial stage when they start transform from solid agricultural economy into heavy industrial based economy, so it can start borrow to invest and expand the gross production of the country, foreigner willing to invest because of cheap labor and cost of capital. But soon it will enter into stage call diminishing in return if the economy failed to invest in human capital. That was why in 1980 we were richer than Korea indeed, both countries start embark transformation programs rely on tap of foreign capital investment. Korea did focus in human capital development yet we didnt but only ensure quota with NEP policy, so later on they got Samsung LG Hyundai which able to compete in global, we Malaysia only can get Proton and KLCC. Both experienced economy crisis 97/98, but they manage to advance back to first world country with their strong human capital, we are stucked in developing stage. Now with proud of B40.

In short, his method was borrow heavily in short term foreign loan like USD and invest in domestic mkt. So this kind of debt push growth effect made Malaysian economy went into high speed growth, yet unsustainable. Because by borrowing heavily in USD, a country must also ensure their in flow of foreign capital will never stop plus export>import, any deficit need to be funded by inflow of foreign capital. Once the foregin capital stop flow in, the country will fall into "impossible trinity dilemma".

So due to the strong net capital in flow, USD/MYR was rising until 2.5, and we turned from high net saving country (during agriculture based model) into country with ultra high foreign debt (heavy industrial based with low productivity due to protectionism plus low competitiveness= proton for best example) The worst happened when the banking system became very fragile and start gather enough momentum for systemic risk...We had 60 banks and multiple finance companies back in 1996, and all with thin capital. All heavily involved in money lending without proper risk control. In short, our whole economy model was like the US banks in 2008 and also now the Properties Giants in China, borrow borrow and borrow with ultra high leverage. Like Renong, I remember it's recorded more than RM30 billion debt, it was significance compare to Malaysia GDP value, it only worth USD 90 billion ++ in that time.

So until we had done enough of stupid things in 1997, we and other SEA countries all fell into the impossible trinity dilemma for a perfect storm. All foreign capital players can vividly see that the whole region's economy and assets prices were in deep bubble, or like castle in the air, so it was golden time for them to liquidate or start short selling in stock and assets in asia mkt. That was how later the famous 1997 Asia financial crisis strated, it start with Thailand, next Malaysia, and Indonesia and then Korea like domino effect.

And that was when many people remember interest rates was raised to 12%, because Anwar naively think that the rates can please foregin investor and for them to come back put their money back into Malaysia again, ended up it trigger full blown of economic recession. So in 1998 we have to start capital control, and made Malaysia out from international mkt in 1998, because we were technically bankrupt and loosing ability to repay the remaining USD loan. Worse, PNB have to bail out all mega conglomerate by nationalise their debt, so the banking system can revive and continue lend out money for good businesses to rebuild economy activities.

It was the BNM governor in 1998 and then his successor , Tan Sri Zeti reformed and implemented proper governance into all these banks, and cut them until the strongest 10 in mkt, with strong governance and well capitalised. That was why even during when MYR depreciate multiple times in najib tenure, and recently dropped to 4.8, we are still solid and can blow water here. It is very funny to see those naive one keep shouting we supposed bankrupt few mths ago when MYR hit 4.8. Because they have no idea on how much efforts have been paid in past 20 years to rebuild our financial system from scratch (due to one person's ego) until now.

This post has been edited by Jingle91: Nov 24 2023, 02:08 PM

Most if not all foreigners invested in bursa or poorperly in the last few years are underwater. few if any investors are willing to invest in assets in devaluating currency.

with over 50% essential items are imported, devaluating rm cause elevated inflation rate, reducing purchasing power. Unless income rise higher than inflation rate, most will find big ticket items unaffordable


This post has been edited by icemanfx: Nov 24 2023, 06:09 PM

even it might happen, it will be on stagger pattern.. so the impact will be soften and always it will be co relate to FD rate, inflation etc...

i dont see it a serious problem. Case like US rate increase from 0% to 4.5% in 18 months unlikely happen in malaysia.

Manufacturing depends heavily on cheap labour. Given minimum wages is higher and low productivity than competitive countries, few FDI consider manufacturing here. Some old time Japanese are moving out.

This post has been edited by icemanfx: Nov 27 2023, 09:18 AM

Malaysia is now no more suit for massive scale of production heavily rely on cheap land and labor and consume a lot of resources. Now all go for automation so demand on labor is reducing, this is also part of the natural process call "creative destruction" and "structural unemployment" for an economy which is advancing, for good to replace bad. Like Penang, Johor, Klang, Sepang, nilai and Seremban, all are booming due to manufacturing industry.

So those old time story like when a foreign electrical company came to Malaysia buy huge plot of land, build huge factory block after block, and hire few thousand of labors and use hundred of bus kilang to fetch their labors come to sit in production line for 12 hours a day, these already become old time story. Because with Malaysia's current economy of scale, things can't be cheap anymore. Indeed this kind of massive production with huge consumption on all resources like energy is almost came to dead end, even China also facing big problem due to shortage of electrical power supply

I don't like Anwar, but the concept of "manufacturing hub" is actually taking its shape, for production in high tech or highly automation. And it is not because he is very smart to come out with the idea, It already happened since global lockdown due to COVID and US -China trade war.

This post has been edited by Jingle91: Nov 28 2023, 03:29 PM

If automation could replace men, mnc need not invest outside u.s, Japan , Korea and e.u. Many manufacturing process couldn't replace men; mnc invest in 3rd world countries for cheap labour. if cheap labour is not available, few mnc would consider to invest in manufacturing here.

This post has been edited by icemanfx: Nov 28 2023, 04:54 PM

That is called exploitation, by using lesser capital for quick production and easier to shift whenever there is better place, labor can just be lay off easily.

For automation in production, of course you always need enginer, technician and system operators, but not hundred or thousand of labors to sit and use their hand and effort in manufacturing lines.

Automation always need huge capital expenditure at first place that is why MNC hate it. So don't always think in slave mindset. Malaysia population is only 38 mil, labor force is only 14 mil, so it is impossible to compete with China, indon, Thai, and Viet for FDI which only keen in cheap labor for low capital expenditure investment. Like data centre, if you have any friend work in IT, you will see how lucrative it is.

Automation actually happening in our domestic SME, if you go Johor, many factories are starting invest in machinery for their production. It take time and need to be in stagger.

This post has been edited by Jingle91: Nov 28 2023, 04:27 PM

You could call exploitation or whatever, it was how Japan, Korea, Taiwan, PRC, etc developed.

Automation is widely utilized in the car manufacturing industry. But If you visit mercedes factory in Stuttgart would find it is still labour intensive in assembly and many people are needed.

Due to small market size, only few sme could automated.

This post has been edited by icemanfx: Nov 28 2023, 06:12 PM

If current government doesn't want to remain in power then naik until 100% also can

Then, every government should keep negative interest rate

Wrong. Negative interest rate means rakyat need to pay the banks in order to deposit their money with the banks, so rakyat will end up being unhappy the government and vote them out.

If you want to be smart, you should say "Every government should keep zero interest rate "

Zero is a bit obvious lah

1% Mortgage rate

FD get 0.5%

EPF return 3%.

Everyone happy.

Who needs to study economics? Throw them out and burn them.

This post has been edited by boyboycute: Dec 1 2023, 02:43 PM

Since you enjoy throwing and burning economics, I guess you've provided the reason why our PM (formerly Education Minister in the 90s) made passing SEJARAH compulsory to obtain SPM certificate whereas Economics is a subject reserved for underachievers' class

For reasons why most leaderships in central banks, fed, multilateral financial institutions e.g imf, ecb, etc are economists. those defying economic is like defying gravity.

In Bolehland, there's no gravity