OPR down, Why the cut and what it signals?
Most of you might have heard the recent development whereby Bank Negara Malaysia (BNM) recently decided to cut the Overnight Policy Rate (OPR) to 2.75% !
What is OPR then, does it even affect me? Am I affected?
OPR is the interest rate set by the Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) that affects how much banks charge each other to borrow money overnight.
But what does that mean for you? Ask yourself, are you a homebuyer and already paying a mortgage or going to be a homebuyer soon and in the future? If yes, then hurray, it is definitely good news for you!
In a nutshell, when BNM raises the OPR, borrowing gets more expensive, and loans (like home loans, car loans, credit cards) can become more costly.
When BNM lowers the OPR, borrowing gets cheaper, and loan interest rates usually drop. This is certainly good news for homebuyers.
Why the Move?
You might be wondering why now and not then for BNM to make the adjustment? BNM has taken the step as it is actually a cautionary step towards the recent internal and external developments in and out of the country.
When the OPR is adjusted down by 25 basis points. It is a move to support economic growth and to moderate the inflation. With the rising global uncertainties and the recent development in the likes of the U.S. tariffs could be one of the many factors.
Why the sudden move? According to report by Bank Negara website the core inflation in Malaysia averaged from 1.4% to 1.9% and growth is expected to be below target, as the recent Q1, 2025 GDP slowed down to 4.4%, prompting BNM to act early to cushion the economy, since its target is at 4.5 - 5.5%, therefore a need to protect a steady growth.
Is it Great News?
Are you a borrower or saver?
Borrowers (like homebuyers) are likely to pay less interest on your home loan and soon your bank will be adjusting it down. Great News indeed! What does it mean? Lower monthly instalments and more savings in your pocket. So, if you're planning to buy property — it could be a good time to go in!
If you are a Saver with the majority of your hard earned cash in Fixed Deposits or others. Your returns on savings/ deposits will likely be lesser. So your money in the bank will grow slower now with the recent development.
Whether you're a borrower looking to buy or a saver managing your funds, the OPR cut affects you. Now’s the time to review your strategy — and make smarter money moves in today’s changing landscape
With the OPR down by 25 basis points, changes are expected in loan rates and property trends in the coming months. Talk to our PropNex negotiators to understand how this may impact your next property move — and make smarter decisions ahead.
