Interest Rate Increase Next Week?

Although Malaysia’s year-on-year (yoy) export growth of 21.9% to RM52.3bil in May fell below market expectations, economists are still positive on an interest rate increase next week.
Reuters poll of 13 economists had forecast May exports to rise by 25.7% from a year earlier. Exports in April had expanded 26.6% yoy.

Standard Chartered Bank economist Alvin Liew was quoted by Reuters as saying despite the slower exports growth in April and May trade data, these two months of data still pointed to a decent second-quarter economic performance.

“It should still bode well for Malaysia’s second-quarter GDP this year although it is unlikely to outperform the preceeding quarter. As our expectations for a healthy recovery in first half of this year remains intact, we reiterate our view that the central bank is likely to continue normalising interest rates further to suit current economic conditions."

“We expect Bank Negara to hike rates by another 25 basis points at its July 8 policy meeting and thereafter keep the overnight policy rate on hold at 2.75% for the rest of the year, which is the normal rate for the OPR in 2010, in our view,” he said. Source

Editorial Note: General population does not like it when the interest rate is increased. However, this actually shows that our economy is growing from the previous recession. Yeah, the loan payment and all those related with interest rate will climb up a bit, but so does our income and spending power.

Those who know how to make money from the recession and early recovery stage will know that the hike of interest rate is not really a bad thing. Instead, they will use this as an indicator to continue making money.

When economy is recovering, our stock market will be on an uptrend, the real estate segment will flourish once again and businesses will be making more and more profit.

The most important thing in times like this is, WHAT DO YOU WANT TO DO?
If you take action instead of worrying about interest rate, I believe that we can easily forget about the small increment of interest and more focused on making bigger profit from our investments.

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