PARTI Bangsa Malaysia (PBM) has called on the Government to introduce an across-the-board moratorium for all bank loans following Bank Negara Malaysia’s (BNM) recent decision to hike the overnight policy rate (OPR) by 25-basis-point to 2.75%.
While the party understands that the hike is in response to creeping inflation as well as in line with what central banks in other countries are doing, the decision has also resulted in a more challenging environment for Malaysian businesses to operate, according to its president designate Datuk Zuraida Kamaruddin.
On Nov 3, BNM continued with its monetary policy normalisation with a third 25 basis point (bps) hike in a row to bring the OPR to 2.75%. The ceiling and floor rates of the corridor of the OPR are correspondingly increased to 3.00% and 2.50% respectively.
This is in tandem with the forecast of most economists who have expected the OPR to reach 2.75% in November 2022, January 2023 (3.0%) and March 2023 (3.25%).
“PBM leaders, including myself, have received numerous complaints from the corporate sector, particularly small and medium enterprises (SMEs),” she revealed in a media statement. “Many are facing cash flow difficulties and had barely turned their business around since April 1 when the country started to transition into the endemic stage.”
While all sectors of the economy have now re-opened, Zuraida said the pace of economic recovery is still far from the pre-pandemic levels.
“The war in Ukraine, disruption in the global supply chain and climate change have only worsened the situation,” she stressed. “This is inevitable considering Malaysia is a global trading nation.”
Zuraida also shared feedback received by PBM that many businesses had structured their loans on the assumption that the economy would rebound but this does not appear to be the case as even the World Bank has recently revised downward Malaysia’s 2023 growth target from 4.5% to 4.2%.
“This is why we believe a moratorium can be a critical lifeline for businesses, particularly during such challenging times,” she justified. “Economists have validated the success of Malaysia’s moratorium plans in the past and I am sure it will have the same effect now.”
Added Zuraida: “Furthermore, Malaysian banks have proven to be resilient, having made respectable profits even at the height of the pandemic. They are financially more than healthy enough to absorb any shocks that may arise due to the moratorium.” – Nov 9, 2022
