BANK customers should decide wisely whether to opt for the six-month moratorium (deferment) on repayment or continue to pay their monthly instalments as usual based on their cash capability and anticipation of job certainty or uncertainty due to the Covid-19 impact.
Malaysian Institute of Economic Research (MIER) deputy director Prof Dr Jamal Othman said previous misunderstandings about the moratorium had been resolved and those who chose to postpone the repayment were allowed to pay the interest through several methods depending on which option they felt was better for them.
“If cash is needed in one’s daily lives, or there may be job uncertainty in the future, it may be advisable to take the deferment, but for those who wish to continue paying the instalments at the same amount, they may continue to do so, depending on their cash capability.
“Those who feel that there is no problem in continuing to make the normal repayments can do so. One can also make a profit by investing the deferred payments, and resume the repayment after the six-month moratorium is over — this is for a risk lover,” he said in an interview with Bernama Radio themed “The Economy in the Midst of Covid-19” today.
Jamal said in today’s poor economic environment, there are constraints in terms of investment choices, but for those who are investment savvy, the moratorium is an opportunity that could be used to make investment.
Commenting on varying moratorium terms at each bank, he said Bank Negara Malaysia (BNM) would need to review whether one policy could be applied to all banks or allow banks to create their own policies based on the principles set out.
“It is better to consult with the respective banks and look at which aspects we can have the most benefit from in this uncertain situation,” he said.
Commenting on the oil price turmoil amid Covid-19, Jamal said: “The impact of oil prices amid Covid-19 may be even more negative on the economy as it is expected that oil prices will continue to decline in 2021. This pandemic will remain with us, so productivity cannot rise and government revenue will decline.
“But in the medium term, the decline in oil prices actually increases productivity and the economic sectors as commodity prices tend to be low,” he said.
Meanwhile, he said the economic sectors that were allowed to reopen need to comply with the security guidelines, as new infections were declining daily.
“Its recovery rate is very good. From my observation, Malaysia’s fight against Covid-19 is comparable to that of South Korea. In South Korea, they did not lock down the economy but used a different model to control Covid-19, so their economy still runs as normal while their control over the outbreak is good.
“So, for Malaysia I think we can achieve a win-win situation, where control of the Covid-19 epidemic is progressing well. And at the same time, the economy is recovering even though we cannot operate fully in the face of uncertainty of the virus trend despite clear signs that we’re in a good direction,” he said.
On how long it would take for the country’s economy to recover, Jamal said it depended on how the world, in particular Malaysia’s major trading partners such as Singapore, the United States, China and Japan responded to Covid-19.
“If they can rebound quickly by the end of this year, I think there is a chance for our economy to rebound by year-end — the fastest in the third quarter or at year-end or early next year where it can be expected to be vibrant but the same as in 2019, but somewhat closer,” he said. — May 6, 2020, Bernama
