There were noises from the general public and politicians questioning the recent BNM's OPR hike. Deemed as a surprise hike in the OPR, some quarters said that this has caused unnecessary financial hardship to borrowers, particularly individuals and small and medium-sized enterprises (SMEs).
So, do OPR hikes have really caused financial hardship for borrowers?
Below is the answer provided by BNM:
BNM recognizes that some people may be more affected than others by the OPR hikes. The OPR is by design a blunt tool to deliver price stability. It does not distinguish between those who have loans and those without in its transmission to the economy.
Having said that, any borrowers – B40, or M40, any individual or businesses – who may be facing difficulties servicing their loans can reach out to their banks or AKPK to work out an alternative repayment arrangement that works for them.
Help is available for borrowers that need it, and such customised arrangements would benefit both the borrowers and the banks.
That said, over 50% of loans from B40 and vulnerable groups are in fixed-rate instruments. So their monthly repayments from these fixed-rate loans will not be impacted by the OPR increases.
However, if we do not manage excessive price pressures like we are seeing in some other economies, this will affect everyone. The B40 and vulnerable groups are the ones who will be the most affected if we let inflation get out of hand, and we will not be able to preserve sustainable growth over the longer term. We cannot and must not let that happen.
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