KUALA LUMPUR: One-third of the Bottom 40 group's debts has been taken at fixed rates for car and personal loans, and as such Bank Negara Malaysia believes the gradual increase of the Overnight Policy Rate (OPR) would not cause conspicuous changes.
Deputy Minister of Finance II Yamani Hafez Musa (Perikatan Nasional-Sipatang) told the Dewan Rakyat this today.
He said loans taken on floating rates were not expected to increase conspicuously.
"At the same time, we must understand that depositors would also benefit from higher returns."
He said that the central bank had done a simulation and found what an OPR reduction of 125 pips or paces points would mean for a housing loan worth RM300,000 for a term of 35 years.
Yamani said it found that the monthly repayment was reduced by RM219.
"For those who took an RM500,000 loan for the same period, the reduction is RM366."
He said the simulation also found that the recent impact of the rise in OPR rates by 50 paces had increased the monthly repayment rate for those servicing 35-year home loans worth RM300,000 by RM85.
"Those servicing RM500,000 loans over the same period will be paying RM142 more."
He was taking questions from Pang Hok Liong (Pakatan Harapan-Labis), who had asked about the government's reserves and its plans to increase its reserves due to the dip in the United States Dollar.
He also asked what was the effects of the hike in OPR.
However, Pang's questions on whether the nation was on the brink of bankruptcy due to the RM1.4 trillion in national debts were not answered.
On a supplementary question on the sustainability of federal reserves, Yamani said the reserves, which, up to June 30 amounted to US$109 billion or RM480.1 billion, was sufficient to support 5.8 months of imports of goods and services and it was 1.1 times the total of the country's short-term external debt.
"This was based on the metric of assessing reserve adequacy, which is an International Monetary Fund tool. For now the reserve rates are sufficient. We will monitor this from time to time to stabilise the ringgit," he said while taking questions on whether the national debt would increase by the end of the year and what were the steps being taken to address the issue.
The central bank had, at the beginning of the year, reported that the reserves were sufficient to foot 7.7 months of imports and this was 1.2 times the total of the country's short-term external debt.