Bank Negara Malaysia BNM Interest Rate 2024 History

Bank Negara Malaysia BNM Interest Rate Malaysia 2024 History

bank negara bnm interest rate malaysia 2024

What is the bnm malaysia interest rate history? The overnight policy rate is an overnight interest rate that has been set by Bank Negara Malaysia (BNM) for banks’ borrowers. It plays a significant role in Malaysia’s monetary policy and can affect the interest rate imposed by the financial institution.

By this means, the loan will be more expensive if the overnight policy rate keeps increasing from time to time. Financial measures such as lending rates, deposit rates, foreign exchange rates, home loans, and any other loans will be affected by the change in overnight policy rate.

Recently, the Monetary Policy Committee (MPC) of Bank Negara Malaysia BNM announced the increase interest rate of the overnight policy rate at 3.00% on 3 May. The increasing overnight policy rate interest rate is generally due to inflation in the economy of the country, Malaysia. On the other hand, this has created a huge burden for the borrower and lender as a whole.

A monthly repayment is automatically slightly increased due to this overnight policy rate. Hence, the BNM had convinced the borrower that the increase bank negara interest rate was part of the economic recovery process towards positive global growth.

What Is Highest BNM Interest Rate Malaysia 2024 History

According to BNM data, the highest bnm rate of overnight policy rate history for the past 10 years in Malaysia was from April 2006 to November 2008.

The bnm interets rate of 3.50% is recorded for that particular year. The rise in malaysia interest rate history 2024 over those years has burdened many individual borrowers.

However, BNM stated that it is necessary to control too much spending and borrowing among the citizens, which could cause inflation.

The increasing overnight policy rate has also been set by the BNM to encourage monetary stability, which will slow down demand during the shortage of supply.

In a nutshell, the economy started to recover after the inflation phase, in which the bnm rate malaysia started to decrease over time.

What Are The Disadvantages Of Interest Rate Malaysia Increase

Obviously, the rise of theovernight policy rate has an impact on society as a whole. Some would say that increasing malaysia interest rate is such a burden to them; however, some would take it as an advantage.

The disadvantages of a rise in overnight policy rate are that borrowers will be entitled to pay higher interest rates on the loan they made.

Besides that, the tenures of the loans will be extended.

In conclusion, the individual who intended to make a loan will face difficulties in being approved by the financial institutions due to these impacts.

Does Bank Negara Rate Malaysia Affect Personal Loan

Does it affect personal loan?

Every personal loan that is made by an individual will be affected by the current overnight policy rate level.

Unless, the personal loan made by the borrower is a fixed-rate loan.

The rise of overnight policy rate seems to be a response to the instability of the economy and spiking inflation.

Thus, overnight policy rate indirectly affects the personal loan made by borrower.

How Does BNM Interest Rate Affect Inflation?

Every country in the world has faced the same economic issue over the years in maintaining a stable and low inflation rate.

Inflation measures the changes in the overall level of prices of goods and services over a period of time.

Many factors can cause the inflation rate to hike over the years such as economic, political, social and others.

Generally, inflation can have a significant impact on the economy if it is out of control.

Hence, the government needs to be aware of these changes to reduce their impact on the development of the economy as a whole.

Thus, Bank Negara Malaysia (BNM) has implemented monetary policy to promote monetary stability.

It is crucial for the purpose of sustaining the development of economic growth. This monetary policy is managed by the Monetary Policy Committee (MPC) which is responsible in adjusting the overnight policy rate.

The changes in bnm interest rate history can affect interest rate in the economy and indirectly influence the inflation rate.

Since Malaysia uses interest rates as its monetary policy tool, the changes in overnight policy rate will affect the inflation rate.

Specifically, overnight policy rate is a tool used in controlling and monitoring the interest rate set by BNM for financial institutions.

A change in overnight policy rate will affect the saving and spending decisions of the citizen. The supply and demand of goods and services will also be affected.

On the other hand, the increasing in the overnight policy rate can lower the inflation rate. This is because the borrowing and spending activities will be decreased.

Hence, overnight policy rate can affect the inflation rate, which shows the performance of the economic development of the country.

Does Interest Rate Affect Money Supply

Economists and financial experts have illustrated that overnight policy rate has a significant effect on the money supply.

The money supply is influenced by the interest rates imposed by financial institutions.

Meanwhile, the interest rate depends on the overnight policy rate set by the central bank, Bank Negara Malaysia (BNM).

Interest rate and money supply have an inverse relationship, however interest rate is equivalent to overnight policy rate.

This means a higher supply of money in the country’s economy is due to the lower interest rate imposed by financial institutions. In the event that BNM sets a lower overnight policy rate, the money supply will increase.

The increase in the money supply will allow lenders to lend more money.

Why Increase Rate in Malaysia

The direction of overnight policy rate will fluctuate over a period of time depending on the economic conditions of the country.

The fluctuation of the overnight policy rate will affect the economic and financial system as a whole.

The overnight policy rate can either increase or decrease depending on the current conditions of the country’s economy in order to avoid recession and lower inflation for economic growth.

There are various factors that influence the rise of the overnight policy rate in Malaysia’s economic and financial markets.

One of the factors is the weakening of the Malaysian ringgit. The decreasing value of the Ringgit currency will increase the cost of importing goods. On the other hand, currency exchange can affect the sale of goods domestically.

All goods that have been imported will increase in cost, which can reduce the supply of goods from other countries.

Therefore, overnight policy rate has been increased over time to strengthen the currency.

Besides that, bank negara malaysia interest rate is increasing due to the increase in inflation risk. Inflation can technically obstruct the growth of an economy.

Furthermore, inflation can also affect the unemployment rate.

The unemployment rate will increase due to the increase in the inflation rate. Thus, every country plays an important role in maintaining the inflation rate over a period of time for better economic growth.

Other than that, the hike in the interest rate in Malaysia is because of the instability of the monetary system.

According to the BNM Governor, this instability of the monetary system has affected the ups and downs of goods prices aggressively and uncontrollably.

Hence, malaysia interest rate needs to be increased to stabilize the monetary system in order to achieve stable economic growth.

The overnight policy rate has hiked three times for the year 2024 with the purpose of achieving the sustainability of the economy.

Since the global economy has passed the difficulties phase, which is the pandemic COVID-19 phase, increasing overnight policy rate is needed to ensure the rapid growth of the economy.

It is important for the country to avoid any economic crisis that will affect its citizens as a whole.

Lastly, the prospect of a high interest rate in foreign markets is one of the factors that led to the rise of interest rate in Malaysia.

This is to ensure that the domestic market can achieve stability along with the foreign market.

Other than that, it is important to reduce the economic gap between Malaysia and other countries. 

BNM Malaysia Interest Rate Historical Data For The Last 10 Years

The able below shows a Malaysia overnight policy rate historical data for the last 10 years set by BNM to maintain positive economic growth over the year.

06 Jul 202303.00
03 May 2023+0.253.00
09 Mar 202302.75
19 Jan 202302.75
03 Nov 2022+0.252.75
08 Sep 2022+0.252.50
06 Jul 2022+0.252.25
11 May 2022+0.252.00
03 Mar 202201.75
20 Jan 202201.75
03 Nov 202101.75
09 Sep 202101.75
08 Jul 202101.75
06 May 202101.75
04 Mar 202101.75
20 Jan 202101.75
03 Nov 202001.75
10 Sep 202001.75
07 Jul 2020-0.251.75
05 May 2020-0.52.00
03 Mar 2020-0.252.50
22 Jan 2020-0.252.75
05 Nov 201903.00
12 Sep 201903.00
09 Jul 201903.00
07 May 2019-0.253.00
05 Mar 201903.25
24 Jan 201903.25
08 Nov 201803.25
05 Sep 201803.25
11 Jul 201803.25
10 May 201803.25
07 Mar 201803.25
25 Jan 2018+0.253.25
09 Nov 2017o3.00
07 Sep 201703.00
13 Jul 201703.00
12 May 201703.00
02 Mar 201703.00
19 Jan 201703.00
23 Nov 201603.00
07 Sep 201603.00
13 Jul 2016-0.253.00
19 May 201603.25
09 Mar 201603.25
21 Jan 201603.25
05 Nov 201503.25
11 Sep 201503.25
09 Jul 201503.25
07 May 201503.25
05 Mar 201503.25
28 Jan 201503.25
06 Nov 201403.25
18 Sep 201403.25
10 Jul 2014+0.253.25
08 May 201403.00
06 Mar 201403.00
29 Jan 201403.00
07 Nov 201303.00
05 Sep 201303.00
11 Jul 201303.00
09 May 201303.00
07 Mar 201303.00
31 Jan 201303.00
08 Nov 201203.00
06 Sep 201203.00
05 Jul 201203.00
11 May 201203.00
09 Mar 201203.00
31 Jan 201203.00
11 Nov 201103.00
08 Sep 201103.00
07 Jul 201103.00
05 May 2011+0.253.00
11 Mar 201102.75
27 Jan 201102.75
12 Nov 201002.75
02 Sep 201002.75
08 Jul 2010+0.252.75
13 May 2010+0.252.50
04 Mar 2010+0.252.25
26 Jan 201002.00
24 Nov 200902.00
28 Oct 200902.00
25 Aug 200902.00
29 Jul 200902.00
26 May 200902.00
29 Apr 200902.00
24 Feb 2009-0.502.00
21 Jan 2009-0.752.50
24 Nov 2008-0.253.25
24 Oct 200803.50
25 Aug 200803.50
25 Jul 200803.50
26 May 200803.50
29 Apr 200803.50
25 Feb 200803.50
29 Jan 200803.50
26 Nov 200703.50
30 Oct 200703.50
24 Aug 200703.50
24 Jul 200703.50
28 May 200703.50
27 Apr 200703.50
26 Feb 200703.50
26 Jan 200703.50
24 Nov 200603.50
26 Sep 200603.50
25 Aug 200603.50
28 Jul 200603.50
22 May 200603.50
26 Apr 2006+0.253.50
22 Feb 2006+0.253.25
20 Jan 200603.00
15 Dec 200503.00
30 Nov 2005+0.303.00
24 Aug 200502.70
25 May 200502.70
28 Feb 200502.70
30 Nov 200402.70
25 Aug 200402.70
26 May 200402.70

Is Islamic Loan Affected By Malaysia Interest Rate History

Generally, the interest rate imposed by the financial institution on conventional loans or Islamic loans will depend on the overnight policy rate set by the BNM.

The BNM will be adjusting the overnight policy rate over time to reduce the inflation rate. A better overnight policy rate will indicate the performance of a country’s economic and banking systems.

A rise or decline in overnight policy rate will affect the base lending rate (BLR) and base financing rate (BFR).

Islamic banks that offer loans to the borrower will determine their base financing rate based on the overnight policy care.

Thus, this means the rise will increase the BFR, which will indirectly affect the Islamic loan acquired by the borrower.

Who Benefits From The Increase

The latest Malaysia interest rate increase by 3% has genuinely affected many businesses and individuals.

Even though the increase of malaysia overnight policy right rate is intended to sustain economic development, it still creates a burden for some.

However, it seems to benefit one party, which is financial institutions.

When malaysia interest rate is increasing, the interest rate in 2024 will also increase.

This means that the financial institution will gain a higher return from the borrowers.