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Higher OPR won't strain borrowers' cash flow - ABM

KUALA LUMPUR: The Association of Banks in Malaysia (ABM) believes the overnight policy rate (OPR), which was raised 25 basis points to 2.25%, will continue to support economic growth in Malaysia and it is unlikely to be a strain on the borrowers' cash flow and repayment ability.

The association said on Friday, March 5 banks were committed to ensure viable borrowers will continue to have access to financial products and services to carry out and grow their businesses in everyone's interests.

"Banks will also be offering more competitive rates to depositors,"  said ABM executive director Chuah Mei Lin.

On Thursday, Bank Negara raised the OPR after keeping it at 2% for seven consecutive monetary policy committee meeting since April 2009. The decision was made following significant improvement in the domestic economy and a moderate rise in inflation amid an improving global landscape promoted the hike in the OPR.

Chuah said with this increase, the OPR remained low if compared to the level prior to the reduction of the OPR to its historic lows in early 2009 as a key stimulus in the face of a severe global economic downturn.  

ABM emphasised the increase in OPR would not impede access to financing, nor affect the industry's lending activities.
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