Raising OPR again will lead to higher cost of living, warns Umno Youth

 

Umno Youth chief Asyraf Wajdi Dusuki has told Bank Negara Malaysia it is ‘inconclusive’ to say that raising the OPR will keep inflation low.

PETALING JAYA: Umno Youth chief Asyraf Wajdi Dusuki has warned that a successive increase in the overnight policy rate (OPR) by Bank Negara Malaysia (BNM) will directly lead to a higher cost of living.

Asyraf said it was “inconclusive” to state that raising the OPR would keep inflation low. He pointed out that a family with housing and other loans, and a car would see their monthly costs go up by hundreds of ringgit should loan repayment rates be hiked.

He said traders and even major industry players with business loans would also be forced to raise their prices, thus burdening consumers.

“The government must look at the matter from a wider perspective as to how to face the economic downturn without directly channelling that burden to the people,” he said in a statement.

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“This is not the right time to consider removing subsidies, floating ceiling prices and raising the OPR because it will directly raise the (cost of living).”

Analysts expect BNM to raise the OPR by another 25 basis points – from 2% to 2.25% – at its fourth monetary policy committee meeting of the year today.

The central bank had hiked the rate in May, lifting it from the record low where it had languished for nearly two years.

Asyraf said the government should stimulate the economy by increasing its spending to improve infrastructure, attract investments, make it easier to do business and create job opportunities.

With Malaysia transitioning to the endemic phase of Covid-19, he said industry players, businessmen and “regular” Malaysians were still in the throes of economic recovery. - FMT