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KUALA LUMPUR (July 18): CIMB Group Holdings Bhd has joined other banks in lowering its base rate (BR) by 20 basis points (bps) for loans or financing products for its Malaysian business.
This follows Bank Negara Malaysia’s (BNM) reduction in its overnight policy rate (OPR) last week.
In a statement yesterday, CIMB said its BR will be reduced from 4.1% to 3.9% per year and its base lending rate/base financing rate (BLR/BFR) will be decreased from 6.95% to 6.75% per year effective on Friday.
As a result, all loans/financing pegged to its BR/BLR/BFR will be adjusted accordingly.
In line with this change, CIMB said its deposit rates will be revised downwards by up to 20bps.
CIMB group chief executive officer Tengku Zafrul Aziz said: “BNM’s pre-emptive 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.”
“We support this accommodative monetary policy that encourages investments, and it 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,” he added.
Last Wednesday, BNM unexpectedly cut the OPR by 25bps to 3% — the first cut in the benchmark rate since 2009 — due to increasing downside risks on the external front amid a low inflationary environment.
This article first appeared in The Edge Financial Daily, on July 18, 2016. Subscribe to The Edge Financial Daily here.
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