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No Adjustments to Overnight Policy Rate, so many so happy

So many forums were discussing about the rate adjustments. So many experts views were sought. Some said, it will be adjusted upwards. Some said No. Some said maybe. I said, most probably adjust and potentially remain. I think I am right. No adjustments this time. Bank Negara (BNM) has kept the rates steady and a report in Reuters said that perhaps this was due to the slowing growth in China and a stagnating European economy. I prefer to believe the following, from BNM’s governor:  “The current stance of monetary policy remains supportive of growth. Further adjustment to the degree of monetary accommodation may be taken depending on how new information will affect the assessment on the balance of risks. This is to ensure the sustainability of the growth prospects of the Malaysian economy.”
I think this is great news for many who are paying for mortgages. As they say this adjustment will cause a huge hole in their pocket. Yet, somehow sales of smartphones especially that few expensive one are still so popular. I have at least 6 friends who would be buying Iphone6 and some of them had also said that this adjustment may jeopardise their life-balance. At the same time, more Starbucks are being opened and everyone of these are full to the brim even on weekdays. Just look at the queue during lunch time. Plus, do not forget the crowd in popular shopping centres or the queues at branded warehouse sales. Mind you, even after discount, these branded items are still four figure and higher. Yet, these people are worried of the 0.25% hike which will cause them to fall into the valley of debts.
Sorry for being a little sarcastic but if you are really so serious about this, then you would not be thinking of all the above things and really, you should not even be buying a home for which the approval from the bank is on the borderline. You should be buying a slightly smaller, cheaper home instead. Or, as usual you do not agree? Great. We can now wait for the next deliberation of the adjustment of rates and you can continue to write on your Facebook walls or forums that BNM should not adjust it higher because life is already so tough. Last but not least, if you change phones every year to look good in front of your friends, your personal internal interest rate has already been adjusted higher every year and surprisingly you are still paying for it.
written on 18th Sept 2014
Next suggested article: Bloomberg, Bank Negara Malaysia, rate adjustment and economic growth

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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