The Malaysian Insight

MIDDLE-INCOME earners fear a gloomy 2023 as interest rates rise.

They told The Malaysian Insight they already bear a high financial burden with rising living costs. 

They said salaries have remained stagnant and do not match their expenses, including loan repayments, which could soar if Bank Negara Malaysia continues to raise the overnight policy rate (OPR.

They demanded that Prime Minister Anwar Ibrahim show he is serious serious about helping the people as promised.

“Bank Negara’s decision to keep increasing the OPR has forced me to go back to work to be able to afford my loan instalments,” said a retiree, who wished to be known as Mani.

The 55-year-old said he sought work as an e-hailing driver because of the OPR increases.

“I don’t want to touch my EPF savings because I want to use it for my children’s education. 

He also questioned the government’s non-intervention on the OPR increases.

“I think Anwar’s unity government should be more courageous and think of ways to deal with issues. It is not enough to talk about inflation; he (Anwar) needs to do what he says,” he said.

Last week, Anwar, who is also the finance minister, said the government had no authority over the OPR hikes, which were the purview of Bank Negara Malaysia.

Financial experts expected the central bank to raise the OPR again this month. If it does, it will be the fifth increase since May last year.

A borrower, who wanted to be known as Ravindran, 31, said he has to set aside RM3,000 a month to pay for house and car loans. 

“If rates rise again, I can’t imagine what it will be like because my salary has not increased while the prices of goods have soared.

“I’m worried that eventually we won’t be able to pay,” he said.

He said the government’s lack of action was disappointing. 

“I remember when Anwar was campaigning for the general election; he condemned the OPR hikes and said they were burdensome. But now the tone has changed and he says the finance minister has no authority,” he said. 

More debts

Sam, 40,  said the monthly repayment for her home now cost RM1,700 compared to RM1,500 previously. 

“I’ve had to cut out unnecessary purchases to trim down my monthly expenses.

“I had wanted to change my car but I’ve postponed that because I don’t want to bear a heavier burden of debt,” she said. 

Sam, who runs a pet clinic, was worried that high interest rates would affect business. 

Kedah Consumer Association’s Mohamad Yusrizal Yusoff said high interest rates affected everyone.

“We sent a memorandum of objecion to Bank Negara after the third OPR increase. We did it because we had received many complaints from M40 families who were affected.

He warned that borrowers might have to borrow more as a result of the hikes.

“We expect people will have to go deepe into debt to pay off loans.

He urged the government to advise BNM not to raise interest rates in the interest of the people. 

“If we, an NGO, can protest to BNM, don’t tell us that the prime minister cannot do so directly,” he said. – January 9, 2023.