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This is new Malaysia Base Lending Rates.

Malaysia Banking Institutions’ Base Lending Rate (BLR)

Source: www.bankinginfo.com.my

KUALA LUMPUR, July 9 (Bernama) — Malayan Banking Bhd (Maybank) will revise upwards deposit and base lending rates, effective July 13, in line with the increase in the Overnight Policy Rate (OPR) by 25 basis points.

Maybank said it would raise deposit rates by up to 25 basis points while the base lending rate (BLR) would be increased by 25 basis points to 6.30 per cent per annum.

The base financing rate (BFR) of Maybank Islamic Berhad will similarly be revised upwards by 25 basis points to 6.30 per cent.

Maybank last revised its BLR on May 18 to 6.05 per cent from 5.80 per cent per annum, previously.

source :BERNAMA

KUALA LUMPUR, July 9 (Bernama) — Bank Islam Malaysia Bhd will revise its Base Financing Rate to 6.3 per cent per annum, effective July 13, from 6.05 per cent, at present.

Managing Director Datuk Seri Zukri Samat said in a statement Friday the revision was due to the 25 basis points hike in the overnight policy rate to 2.75 per cent on July 8.

Bank Islam last revised its BFR on May 18 to 6.05 per cent, from 5.80 per cent, previously.

Source : BERNAMA

KUALA LUMPUR, July 9 (Bernama) — CIMB Bank and CIMB Islamic Bank announced Friday that they will increase their base lending rate (BLR) and base financing rate (BFR) by 25 basis points.

The increase, from 6.05 per cent to 6.3 per cent, will take effect from July 13, 2010, CIMB Group said in a statement Friday.

Correspondingly, the rates on a range of savings and fixed deposit products will be increased by up to 25 basis points, the group said.

The change in rates followed Bank Negara Malaysia’s decision to increase the overnight policy rate (OPR) by 25 basis points to 2.75 per cent on July 8, 2010.

Source from : BERNAMA

Monetary Policy Statement

At the Monetary Policy Committee (MPC) meeting today, Bank Negara Malaysia decided to raise the Overnight Policy Rate (OPR) by 25 basis points to 2.75 percent. The floor and ceiling rates of the corridor for the OPR are correspondingly raised to 2.50 percent and 3.00 percent respectively.

The global recovery has continued in the second quarter, supported by robust and broad-based growth in most emerging economies, in particular Asia , and a moderate recovery in the advanced economies. Nevertheless, volatility in the international financial markets has increased following concerns over the ongoing sovereign debt crisis in several advanced economies. These developments have raised uncertainties on the potential impact on the international financial system and the global economic activity. Going forward, while the assessment is for the global recovery to continue, there is increased risk that the global growth momentum could moderate.

In the domestic economy, recent trends in industrial production, financing activity, labour market conditions and external trade indicate that economic activity has remained robust in the second quarter. Going forward, while external developments may result in some moderation in the pace of growth, the domestic economy is expected to remain strong with continued improvements in private consumption and investment, and augmented by public investment spending.

Domestic inflation recorded modest increases in April and May, mostly on account of supply factors. Prices are expected to rise at a gradual pace in the coming months, in line with the continued improvement in domestic economic conditions, and taking into account possible adjustments in administered prices. Overall, inflation is, however, expected to remain moderate going into 2011.

The MPC considers the new level of the OPR to be appropriate and consistent with the current assessment of the growth and inflation prospects. The stance of monetary policy continues to remain accommodative and supportive of economic growth.

Bank Negara Malaysia
8 July 2010

The overnight policy rate (OPR) or the key lending rate has been revised twice since the start of the year. From record-low rate of 2%, it has now risen to 2.50%.In tandem with the rise, the base lending rate(BLR) has been increased by 50bps to 6.05%, up from 5.55%. Economists have predicted that the OPR would rise to 2.75% by year-end. How do you deal with the effects of a rising mortgage rate, which translates into higher monthly loan instalments?

One strategy is to look at your home loan. According to Liew Swee Lin, head of consumer banking at Alliance Bank, consumer may ask their lenders to reschedule and lower their monthly commitments, although this would result in a longer loan tenure. “Consumers should opt for lower instalment schedules with longer tenure on new loans, even though they can afford to pay more. This buffer would minimize the risk of straining their cash flow in the event of upward adjustments on instalment that go with rising interest rates,” she says. Liew believes that this strategy is ideal, as the consumer has the option to pre-pay more to save on interest, and re-draw on excess funds free of charge.

So, should you pare down your mortgage debt before next rate hike? Financial coach Milan Doshi says it all depends on whether the loan is for your residence or an investment property.You can consider the strategy if it is the former, he says “ This is provided you have excess cash, and you don’t see any opportunities to make more than twice of what you can save in six months or less with minimal risks.”

On the other hand, Milan reckons that it will not be necessary to pare down the debt on your investment property as long as the rental is higher than your monthly instalment.

Adrian Un, sales director at Mortgage Broker Sdn Bhd, suggests that consumers may also refinance with another bank that offers a fixed-rate of three to five years. However, James Tan, property consultant from Raine & Horne International Zaki + Partners, reckons that consumers should go for fixed-rate loans offered by insurance companies. While commercial banks offer short-term fixed-rate home loans, insurance companies tend to offer fixed –for-life interest rates. As at writing, some of the major insurance companies were offering rates that stood at 4.99% (non Zero moving package) or 5.25% (zero moving package) a year.

Alternatively, if you are holding multiple properties, this will be a good year to sell off one or two units for capital gains as the demand is still high, say Un. “ Selling your properties allows you to pare down your debt and keep the cash for future investment.”

However, Tan believes that investors should hang on to what they have as prices are still inching upwards.”If you sell, you will not get back a similarly cheap property.”

Industry players, however, do not recommend increasing the rental of investment properties. ”Increasing rental is not the way to go as tenants are also spoilt for choice for new propertiers,” says Un, adding that this may encourage tenants to buy their own property instead, which may result in loss of rental income.

Dr Yeah Kim Leng, group chief economist of RAM Holdings, agrees, adding that rental adjustments is generally a more difficult approach. “Rental is being determined largely by supply and demand. In an oversupply situation, it will be a buyer’s market as well as a tenant’s market as both property prices and rentals will be depressed.”

Source: Personal Money , July 2010.