Umno Youth objects to Bank Negara's interest rate hike

 

Umno Youth does not support Bank Negara’s decision to raise interest rates and expressed doubt if doing so would affect inflation.

Wing leader Asyraf Wajdi Dusuki said although the increase appeared minimal, the effects on society were huge.

“A family may have several loans to finance, such as their home, vehicle or personal loans. Their financing cost may increase by a few hundred ringgit.

“Businesses with commercial loans will have to increase prices which will definitely affect consumers,” he wrote on his Facebook page.

Asyraf said the government’s claim that an interest rate hike would help curb inflation could not be accepted in total.

He said that household income levels were dropping while businesses were not performing well due to the Covid-19 pandemic.

However, the government was considering removing some subsidies and increasing the ceiling prices of some staple goods, on top of increasing interest rates.

“Moves that will increase the cost of living that is not tempered with an increase in income would cause inflation, including raising interest rates,” he said.

Asyraf urged the government to instead focus efforts on spurring the economy, increasing spending on infrastructure, encouraging investments and making it easier to do business in order to increase the number of jobs.

Yesterday, Bank Negara raised its overnight policy rate (OPR) by 0.25 points to 2.25 percent, despite Malaysia’s relatively low inflation rate.

However, the price of staple food has been increasing of late due to the higher cost of animal feed, grains and fats.

The OPR was kept relatively low at 1.75 percent between mid-2020 and early this year due to the Covid-19 pandemic. - Mkini