KUALA LUMPUR – Malaysian banks have announced a 25 basis points (bps) cut in their base rate (BR) and base lending rate (BLR) following the 25 bps reduction in the Overnight Policy Rate (OPR) announced by Bank Negara Malaysia (BNM) on Tuesday. This is the fourth time this year that the key interest rate was cut by the Monetary Policy Committee of BNM.
Hong Leong Bank Berhad and Hong Leong Islamic Bank Berhad (HLISB) said they will reduce their BR and Islamic BR to 2.63% from 2.88% effective July 10.
In a statement, they said their Base Lending Rate (BLR) and Islamic Financing Rate will be lowered to 5.64% from 5.89%, with a similar 25 bps cut in the board rates of its fixed deposits.
“Cash flow remains a serious concern especially for certain sections of the business community and households which are continuing to deal with a heavy blow to their finances amidst the weaker economy, job losses and employment prospects.
“This further reduction in interest rates will provide additional stimulus to accelerate the pace of the economic recovery in the second half of 2020,” said Domenic Fuda, group managing director and CEO of Hong Leong Bank.
Meanwhile, Bank Islam Malaysia Berhad said it is revising its BR by 25 bps to 2.52% from 2.77%, and its Base Financing Rate to 5.47% from 5.72% also effective July 10.
Its deposit rates will also be adjusted downwards by 25 bps, the bank said in a statement.
Bank Islam CEO Mohd Muazzam Mohamed said, “The revision is timely as the moratorium period is coming to an end. We foresee that this move will cushion the post-moratorium impact to majority of our customers by easing their monthly instalment commitments.”
CIMB Bank Berhad and CIMB Islamic Bank Berhad said they will reduce their BR and BLR by 0.25% effective July 13. The bank’s fixed deposit and fixed return income Account-i board rates will also be correspondingly adjusted by 25bps.
Similarly, Bank Muamalat Malaysia Berhad’s BR and BFR will be accordingly revised by 25 bps from 2.81% p.a. to 2.56% p.a. and 5.81% p.a. to 5.56% p.a. respectively, with effect from July 13 July. This will affect all floating rate financing packages pegged to the BR and BFR.
In line with the reduction in BR and BFR, Bank Muamalat’s FTA-i deposit rates will also be revised downward by 25 bps.
“The reduction will lower the costs of financing and result in higher disposable income in the hands of consumers. We hope this will boost spending and spur the domestic economy,” said CEO Khairul Kamarudin.
Standard Chartered Malaysia Bhd and Standard Chartered Saadiq Bhd said they are bringing down their BR to 2.27% and BLR/base financing rate to 5.45%.
“The downward revision of 25 basis points will take effect on July 14, and also applies to the Fixed Deposits interest and Term Deposits-i profit rates across all tenors,” the bank said in a statement.