ALOR STAR: Spend within your means and avoid signing up for new loans or using your maximum credit limit unless it is absolutely necessary.
This is the advice from the Consumers Association of Kedah (Cake) in wake of Bank Negara Malaysia's recent move to increase the overnight policy rate (OPR) by 25 basis points to three per cent.
In lambasting the central bank for yet another OPR hike, Cake president Yusrizal Yusoff advised the public to avoid taking on more unnecessary financial liabilities for the time being.
"Please spend within your means... just because certain loan providers offer you credit facility, it doesn't mean you should max out your credits.
"We have always advocated for smart financial decisions, this includes avoiding taking unnecessary loans. You can take loans but strictly for necessity reasons," he told the New Straits Times.
With the uncertain economic outlook, Yusrizal said the practical thing to do right now was to borrow less.
On Wednesday, Bank Negara decided to increase the OPR by 25 basis points to three per cent, correspondingly increasing the ceiling and floor rates of the corridor of the OPR to 3.25 per cent and 2.75 per cent respectively.
Bank Negara in a statement said that with the domestic growth prospects remaining resilient, its Monetary Policy Committee (MPC) had judged that it was timely to further normalise the degree of monetary accommodation.
Yusrizal said the move was untimely as it would just pile more pressure on individuals and businesses to service their loans.
"This OPR hike will obviously burden individuals and businesses in servicing their loans. This will pressure the people with the cost of living continues to skyrocket.
"The move is absolutely untimely... many people are still struggling out there," he said.
Yusrizal urged the people to start a petition and to hold peaceful protests to show their displeasure over Bank Negara's latest move.
"The people need to speak up against immediate future OPR increments since many are still struggling to service their loans since the pandemic," he said.
Following the OPR hike, Malayan Banking Bhd (Maybank), Affin Bank Bhd (Affin Bank) and RHB Banking Group, have announced that they will revise upwards their standardised base rate (SBR), base rate (BR) and base lending rate (BLR) by 25 basis points effective from May 8.
Hong Leong Bank announced its SBR for Hong Leong Bank and Hong Leong Islamic Bank will be at 3.00 per cent effective May 9.