Bank Negara decides on OPR, not us, says Tengku Zafrul

 

Finance minister Tengku Zafrul Aziz says any OPR increase will not enrich the banks as they also have to pay higher interest rates to depositors. (Bernama pic)

KUALA SELANGOR: The government does not intervene in decisions regarding the overnight policy rate (OPR) which is determined by Bank Negara Malaysia’s monetary policy committee, finance minister Tengku Zafrul Aziz said.

He said the OPR came under the Central Bank of Malaysia Act 2009.

“Many say the government prioritises the banks (by increasing the OPR), however the government does not interfere in this matter. This perception should be corrected.

“The OPR increases do not enrich the banks because they also have to pay higher interest rates to depositors,” he told reporters after officiating an event here.

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Tengku Zafrul said the country’s OPR was now at 2.5% after the central bank raised 75 basis points since January, compared with 3% before the Covid-19 pandemic.

“It is necessary to compare with other countries’ bank rates, some of whom have raised by more than 225 basis points. But we are still at the 2.5% level. Is this high when compared with the 6.9% growth in the first half of the year, and the second quarter growth of 8.9%?

“The country’s OPR before the Covid-19 pandemic was at least 3% since 2013. So, it is still low and the monetary policy is still accommodative,” he said.

The finance minister also said he was confident that the Malaysian economy would be able to achieve the official 2022 gross domestic product growth projection of between 5.3% and 6.3%. - FMT