THE EFFECT OF AN OVERNIGHT POLICY RATE (OPR) HIKE ON HOME LOAN IN MALAYSIA

Authors

  • Suhana Ismail School of Real Estate & Building Surveying, College of Built Environment, UNIVERSITI TEKNOLOGI MARA
  • Nurul Aqilah Aluddin School of Real Estate & Building Surveying, College of Built Environment, UNIVERSITI TEKNOLOGI MARA
  • Anis Syazwani Sukereman School of Real Estate & Building Surveying, College of Built Environment, UNIVERSITI TEKNOLOGI MARA
  • Siti Hasniza Rosman School of Real Estate & Building Surveying, College of Built Environment, UNIVERSITI TEKNOLOGI MARA
  • Amirul Akram Noorhisham Department of Urban Studies & Planning, Faculty of Social Sciences, UNIVERSITY OF SHEFFIELD

DOI:

https://doi.org/10.21837/pm.v22i31.1475

Keywords:

Overnight Policy Rate (OPR), Home Loan

Abstract

Bank Negara Malaysia (BNM) has employed numerous monetary policies to reduce inflation and ensure financial stability. It includes the change in the Overnight Policy Rate (OPR), which is the benchmark interest rate at which banks borrow and lend cash overnight. The purpose of this research was to explore the implementation of OPR and the effect of OPR hike towards home loans. This was achieved through a qualitative research design involving interviews with representatives (bankers) from Bank Negara Malaysia as well as conventional and Islamic banks. The results revealed that OPR implementation is conducted by Bank Negara Malaysia through the Monetary Policy Committee (MPC), which is in charge of developing policies for conducting monetary activities. While the OPR hike inflicts an impact on the interest rates of home loans, statistics from BNM showed an increase of home loan borrowers during the third quarter of this year compared to the second quarter across both conventional and Islamic banks. These findings offer critical insights into the effects of OPR increase on Malaysian home loans. Therefore, financial institutions should establish risk management measures while simultaneously providing home buyers with reasonable and accessible financing choices.

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Published

2024-05-31

How to Cite

Ismail, S., Aluddin, N. A., Sukereman, A. S., Rosman, S. H., & Noorhisham, A. A. (2024). THE EFFECT OF AN OVERNIGHT POLICY RATE (OPR) HIKE ON HOME LOAN IN MALAYSIA. PLANNING MALAYSIA, 22(31). https://doi.org/10.21837/pm.v22i31.1475

Issue

Vol. 22 (2024): PLANNING MALAYSIA JOURNAL : Volume 22, Issue 2, 2024

Section

Article

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eISSN: 0128-0945 © Year. The Authors. Published for Malaysia Institute of Planners. This is an open-access article under the CC BY-NC-ND license.

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