The B40 group is less likely to be impacted by Bank Negara Malaysia’s (BNM) Overnight Policy Rate (OPR) hike, says Deputy Minister of Finance II Yamani Hafez Musa.
Speaking at the Dewan Rakyat on Monday (1 August), he explained that this is because one-third of the B40 group has taken fixed rate loans for car and personal loans.
He also said that loans taken on floating rates were not expected to increase conspicuously following the rate hike.
“At the same time, we must understand that depositors would also benefit from higher returns,” he said, adding that BNM had done a simulation on the effect of the decrease in OPR against the housing loan instalment.
The simulation found that an OPR reduction of 125 pips or paces points would decrease the monthly repayment by RM219 for a housing loan worth RM300,000 for a term of 35 years.
“As for those who took an RM500,000 loan for the same period, the reduction is RM366,” he added.
Meanwhile, he said the simulation also found that the recent rise in OPR has increased the monthly repayment rate for those servicing 35-year home loans worth RM300,000 by RM85, while those servicing RM500,000 loans over the same period will be paying RM142 more.
He said this in response to a question from Pang Hok Liong (Pakatan Harapan-Labis), who had asked about the government’s reserves and its plans to increase its reserves due to the dip in the United States Dollar and the effects of the hike in OPR.
However, Pang’s questions on whether the nation was on the brink of bankruptcy due to the RM1.4 trillion in national debts were not answered.
Commenting on the sustainability of federal reserves, Yamani said the reserves, which, up to 30 June amounted to US$109 billion or RM480.1 billion, was sufficient to support 5.8 months of imports of goods and services and it was 1.1 times the total of the country’s short-term external debt.
“This was based on the metric of assessing reserve adequacy, which is an International Monetary Fund tool. For now, the reserve rates are sufficient. We will monitor this from time to time to stabilise the ringgit,” he said.