Overnight Policy Rates and SRR

I caution the decision by the Bank Negara Malaysia to reduce the OPR further down by 5o basis points to 2% as at 24th February 2009. The move by the Malaysian Central Bank could be a hint that a negative is expected for the 4th quarter 2008 GDP figure which is to be announced Friday 27 February 2009. Thus the ceiling rates is now 2.25% and floor rates 1.75% respectively.

Reducing the SRR by 1% to 1% commencing 1st March 2009 is seen now as a needed or just a gimmick. The problem is banks are NOT giving out loans to the needy. Banks have the money to create more money, its only the ordinary Malaysians who are broke.

Datuk Najib as the Finance Minister must take a bold action now. Are we gonna keep reducing OPR into the negatives or are we gonna continue spending public money as sinking funds? More measures must be tackle in the 2nd stimulus package which is to be announced on March 10th 2009. I am certain as an economics graduate Datuk Najib can look beyond fiscal and monetary aspects.

As a human I don't want to take the bus again or lose my home!