Bank Negara’s drastic OPR cut ‘good news’ for post-Covid recovery

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Lower loan repayments as a result of a drop in BNM’s overnight policy rate will increase disposable incomes for individuals and businesses, say economists.PETALING JAYA: An economist has welcomed Bank Negara’s slashing of the overnight policy rate (OPR) to its lowest level since 2010, saying it will help the economy recover because it supports consumption and investment spending. Yeah Kim Leng of Sunway University said the reduction of the OPR by 50 basis points to 2% – the lowest in a decade – would ultimately increase the disposable incomes of corporate and individual borrowers. OPR is the central bank’s policy rate used by banks to set interest rates for loans. With lower OPR rates, borrowers of flexible interest rate loans will enjoy lower loan servicing payments once banks adjust their base lending rates. A number of banks have since adjusted their rates. “If you took a perso…