CIMB Group Lowers Base Rate

Posted on: 2016-07-18

PETALING JAYA: CIMB Group became the latest financial services group to lower the base rate (BR) following Bank Negara’s unexpected move to cut the benchmark overnight policy rate by 25 basis points to 3% on July 13.

CIMB said in a statement that the BR would be lowered by 20 basis points or 0.2% to 3.9% from 4.1% for its Malaysian loans/financing products.

The base lending rate (BLR) and base financing rate (BFR) would be decreased to 6.75% from 6.95% effective July 22.

It said all loans/financing pegged to BR/BLR/BFR will be adjusted accordingly.

“In line with this change, CIMB’s deposit rates will be revised downwards by up to 20 basis points,” it added.

CIMB group chief executive Tengku Datuk Seri Zafrul Aziz said the central bank’s “preemptive decision to reduce the OPR is both timely and strategic, given the current challenges faced by the domestic economy due to possible spillover effects from global uncertainties”.

He said CIMB supports this accommodative monetary policy that encourages investments and “is favourable to borrowers and consumers to improve prospects moving forward. This cut will also reduce the risk of external imbalances, in view of the general decline in global interest rates”.

Last Friday, AmBank (M) Bhd also reduced the BR and BLR by 20 basis points to 3.80% and 6.65% respectively to be effective July 19.

AMMB Holdings Bhd group chief executive officer Datuk Sulaiman Mohd Tahir, also the CEO of AmBank, said while deposits would be less attractive moving forward, consumers could explore other investment opportunities such as unit trusts and other wealth management products which could potentially yield higher earnings.

“Granted, soft consumer sentiment and low investor confidence is likely to continue affecting domestic growth. However, the lower BR/BLR will benefit borrowers.

“On the whole, I am confident that this is a definitive step in the right direction and will play a part in supporting our economic growth in the coming months,” he said.

Malayan Banking Bhd, the country’s largest financial services group, was the first to announce adjustments to the BR and BLR following the OPR cut.


Source From: The Star

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