On Workers' Day, Guan Eng calls for interest rate status quo

 

DAP has urged Bank Negara not to raise interest rates during its monetary policy committee meeting over the next two days.

In a statement in conjunction with International Workers’ Day, party chairperson Lim Guan Eng said raising borrowing costs will reduce the disposable income of workers.

"The unemployment rate has receded to 3.5 percent or 592,000 workers in February from 3.6 percent in January, indicating continued momentum for economic growth to generate income to match the cost of living pressures.

"There is no need for Bank Negara to raise overnight policy rate (OPR) or interest rate now that the March Consumer Price Index has eased to 3.4 percent from 3.7 percent in February," he added.

Lim said that as inflation eases, Malaysia must now focus on generating economic growth in view of the global economic downturn and expected recession in the US.

"The inability to sustain economic growth from raising OPR and the further burden of any higher financial costs may cause small businesses to close and unemployment.

"May Day celebrations today would be muted and meaningless if Bank Negara increases the OPR at its meeting tomorrow,” he added.

This is as the only beneficiary of increasing interest rates would be banks, Lim said, as it will help increase their interest margins and profits.

"Bank Negara must demonstrate that it has a heart for the workers’ sufferings by standing together in solidarity with our labour force," he added.

Bank Negara has raised the OPR four times over the past year to keep up with similar rate increases in the US. The US central bank last raised rates in March. - Mkini