PETALING JAYA: The latest increase in the overnight policy rate (OPR) by Bank Negara Malaysia has raised concerns, particularly among those with multiple loans.
Single mother Siti Abdul, 48, from Kuala Lumpur, is worried that her wages will be stretched to the maximum with higher housing and car loans to service every month.
“My instalments will go up and I also expect to see a definite rise in the cost of goods.
“The OPR rises but our salary remains the same, which means people will have less money in their pockets,” she said.
Yesterday, the central bank raised the OPR by another 25 basis points to 2.25%, in line with the expectations of most economists.
The OPR influences the lending rate banks charge borrowers. It also helps set the savings rate.
The higher OPR is a reflection of a stronger economy as the recovery process from Covid-19 is well underway, Bank Negara said.
For executive Alaia Mariam Kamal, 29, from Ampang, even with the increase in minimum wage, things are still hard.
The government’s call for the public to manage their household expenses through infographics was not helpful, she added.
“Some people have to ikat perut (tighten their belt) just to pay their monthly commitments.
“We understand that the government is trying to save the country’s economy but the rakyat are the ones facing the consequences.
“People are stressed out with the rising cost of living, their commitments and the debts that they have to pay,” she said, adding that she has multiple loans to service.
Assistant manager Andrew Yew, 32, from Kuala Lumpur, said with the hike, he wondered what the government will subsidise now in order to cover the difference.
Robert Foo, a financial planner, said with OPR rates going up, the price of items may also go up.
“The man on the street, especially the B40, may feel the prices are too high for them.
“However the top 10 per cent of income earners will not feel much of the effects because they are financially stable. But those who do not plan for their life and finances will also feel it.
“Housing loan interest rates may go up and the monthly amount that people have to pay to service their housing loans will be higher.
“Similarly, for car loans, rates may also go up slightly, but many people can’t feel it because these loans are hire-purchase rates,” he said.
As for spending habits, Foo said it depends on a person’s financial capability.
“The inflation rates will be higher but, like I said, it depends on whether you are part of the B40, M40 or top 10 per cent to feel the inflation rate,” he said.