Higher interest rate doesn't bode well for local REITs, except this one...

Raising interest rates will likely be the main monetary policy tool for many central banks over the next 6 - 12 months, as global inflation worsens. Locally, there could be one more OPR hike in the remainder of 2022 after the previous two rate hikes totaling +50bps bringing the OPR to the current level of 2.25%.

Fyi, the current mortgage rates are around 3.15%. Of course, a higher mortgage means higher financing costs for the REIT sector, which will lead to earnings being compressed. (Click here to read more about REIT-related articles)

The type of loan is the determining factor...

Purchase Insurance/Takaful via EPF i-Lindung Platform? Read here...

Do you know that our EPF account can do many things? Not only that we can do special withdrawals (limited time offer only lah, now no more...), invest in approved unit trust schemes, buy a house, reduce the housing loan balance, and now... we can buy insurance/takaful also 😃😃😃

(Before we proceed further, I would like to remind you that our EPF money is primarily meant for our retirement ya. Please bear this in mind before we make any EPF withdrawals 👀)

So, what is EPF i-Lindung platform? 🙌🙌🙌

How Does Overnight Policy Rate (OPR) affect Inflation?

"Inflationary pressures have continued to increase, mainly due to elevated commodity prices and strong demand conditions, despite some easing in global supply chain conditions."

"Consequently, central banks are expected to continue adjusting their monetary policy settings, some at a faster pace, to reduce inflationary pressures," Bank Negara said in a statement after hiking the benchmark OPR for the second time this year to 2.25% (May +25bps and July +25bps).

The last back-to-back hike was May-Sept 2010.

The Inflationary Pressures... 💢💣

The Role of Overnight Policy Rate (OPR) in BNM's Monetary Policy

Fuiyoh, the interest rate is creeping up again, rebounding from the record low level of 1.75% OPR during the pandemic lockdown period. What is that OPR? What is monetary policy?

Lately, many people are arguing that this is not a good time to hike interest rates amid the rising cost of living (high inflation) and our economy is not yet fully recovered. 💢💣

In this article, let us understand the role of OPR in our economy here...

Overview of Monetary Policy in Malaysia