Overnight Rate

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Overnight Policy Rate (OPR)

Overnight Policy Rate (OPR) is the interest rate / profit rate at which a bank lends to / receives from investment with another bank. The OPR is determined by Bank Negara Malaysia (BNM) in the Monetary Policy Committee (MPC) Meeting held throughout the year.OPR changes will directly influence Base Lending Rate (BLR) / Base Financing Rate (BFR) revisions. A rise in OPR means the bank will increase the BLR / BFR and resulting in a higher effective interest rate / effective profit rate which will increase the loan/financing repayment / payment for products tagged to BLR / BFR.

Example: Assuming that BLR / BFR is at 6.60%, a 0.25% hike in OPR will increase BLR / BFR from 6.60% to 6.85% respectively.A drop in OPR means the bank will decrease the BLR / BFR which resulting in a lower effective interest rate / effective profit rate which will decrease the loan / financing repayment / payment for products tagged to BLR / BFR.

Example: If there is a 0.25% drop in OPR, BLR / BFR will reduce from 6.60% to 6.35% respectively.The current reported OPR is 3.25% which is raised on 10 July 2014 by BNM during its MPC meeting.  |

Base Lending Rate (BLR) - a rate determined by conventional financial institutions based on the cost of lending to its consumers

Base Financing Rate (BFR) - a rate determined by Islamic financial institutions based on the cost of financing to its consumers

FREQUENTLY ASKED QUESTIONS (FAQs) 

1. Is the increase in BLR / BFR applicable to all types of facilities? 

The increment in BLR / BFR is applicable to all home loans / financing or personal financing facilities with interest / profit rates pegged to the bank’s BLR / BFR. 

2. Can I opt to retain the amount of my existing monthly instalment? 

Yes, you can submit a request through Banks if you wish to maintain the existing monthly instalment amount and extend the loan / financing tenure but it...