Another OPR Cut in March 2021? Really?
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There’s a prediction that there would be another OPR cut in March 2021.
OPR stands for Overnight Policy Rate. Briefly, this is the interest rate. The lower it goes, the more sleepless nights which those with huge amounts in Fixed Deposits would be having. However, the lower it goes, the happier would be those with loans with the banks because the repayments would be adjusted accordingly too.Well, it’s certainly not an easy decision. This OPR is part of monetary policy which our Bank Nagara Malaysia (BNM) would decide in order to either be more accommodative to facilitate GDP growth or perhaps start some cooling measures if they feel the market is no longer near the fundamental. One country may be starting cooling measures soon for its property market because of some reasons. Read here. Who forecasted and why was it forecasted?
HSBC Global Research Asean chief economist Joseph Incalcaterra said that Bank Negara Malaysia is expected to announce a 25 basis points cut to the Overnight Policy Rate (OPR). This will be taking the OPR to 1.50 per cent in the next Monetary Policy Committee Meeting on Match 4. He said that the may continue to reallocate expenditure towards short-term measures, but a large package of fresh spending is unlikely.
He shared that more assistance will be needed in the short term to offset the impact of the latest lockdown and this suggests the burden will fall on monetary policy. He said in a note, “We have continued to stress that Bank Negara has substantial policy space that should be used to confront clear hit to economic activity and fresh disinflationary pressures.”
Personally, from my observations on the ground as well as the fact that COVID-19 total is actually on a downtrend (read here) around the world plus vaccinations are now starting in many countries if not most countries within these few months, I do think BNM will continue to monitor and thus adopt a wait-and-see first prior to any further adjustments. If the cut is not needed and they hold back, then they have more to play with should a cut is needed.
If it (BNM) cuts too soon and there little effects from the cut, then when it’s needed, they will have fewer options to play with. By the way, I am NOT from the bank, NOT from the developer, NOT from the real estate agency yeah. I am just a blogger. We will know who’s right very soon anyway. 4th March 2021 is the meeting of the Monetary Policy Committee (MPC) and an announcement follows very quickly most of the time after the MPC meeting.
Yes, all these OPR decisions will definitely have an impact on the property market oo. Happy waiting.
This article was originally published by kopiandproperty