What Is OPR? How Malaysia’s Interest Rate Affects Your Loans and Savings

The Overnight Policy Rate (OPR) is the benchmark interest rate set by Bank Negara Malaysia (BNM). It determines the cost at which banks lend to each other overnight and plays a pivotal role in shaping loan interest rates, savings returns, and overall economic activity. Changes to the OPR have direct implications for Malaysians from home loan borrowers and fixed‑deposit investors to businesses and SMEs.

1. Understanding the OPR

• The OPR is the policy interest rate guiding interbank borrowing and lending in Malaysia.

• It anchors lending bases like the Base Rate (BR) and Standardised Base Rate (SBR), influencing both consumer and corporate borrowing costs.

• Any shift in the OPR sends ripple effects through bank loan interest rates, mortgage rates, and deposit returns.

2. Latest OPR Cut to 2.75%

• On 9 July 2025, BNM reduced the OPR by 25 basis points, from 3.00% to 2.75%—the first cut since May 2020.

• This move followed a Reuters poll forecasting the cut amid slowing growth (GDP at 4.4%) and low inflation (1.2%).

• The OPR corridor was adjusted ceiling lowered to 3% and floor to 2.5% signalling a strategy to rejuvenate lending and consumer spending.

3. How OPR Affects Loans and Borrowing

• Lower OPR typically leads to reduced interest rates on variable loans (mortgages, personal loans, SME financing), thereby lowering monthly loan repayments.

• Example: An RM500,000 home loan may save roughly RM70–RM75 monthly after a 0.25% cut.

• Higher OPR does the opposite—raising borrowing costs, monthly instalments, and loan tenures.

4. The OPR’s Impact on Savings

• Depositors may see lower interest returns on savings accounts and fixed deposits following a rate cut.

• Conversely, a higher OPR boosts interest earnings, making savings instruments more attractive.

5. Why BNM Adjusts the OPR

• BNM uses the OPR to maintain economic stability by balancing inflation control, employment, and GDP growth:

• Raise OPR → curbs inflation and prevents overheating.

• Cut OPR → stimulates economic activity, boosts lending, supports investment and consumer spending during downturns.

6. Current Impact of the 2025 OPR Cut

• Cheaper borrowing: Lower loan rates help households manage expenses and encourage businesses to invest.

• Liquidity boost: Combined with the earlier cut in banks’ statutory reserve requirement (SRR), more funds are freed for lending.

• Economic uplift: The cut is designed to spur domestic spending, cushion trade risks, and cushion Malaysia’s export-focused economy under pressure.

The OPR is a cornerstone of Malaysia’s monetary policy, shaping borrowing costs, savings returns, and economic momentum. The 2025 rate cut to 2.75% offers relief to borrowers, poses decisions for savers, and signals the central bank’s commitment to supporting growth. Stay informed on OPR trends, whether you’re managing a household budget, career finances, or business operations.

Looking for new career opportunities? Check out our latest job openings here: Job listings

Need hiring support? Connect with Reeracoen Malaysia today!

Disclaimer:
The information provided in our blog articles is intended for general informational purposes only. It is not a substitute for professional advice and should not be relied upon as such. 
While we strive to provide accurate and up-to-date information, the ever-evolving nature of certain topics may result in content becoming outdated or inaccurate over time. Therefore, we recommend consulting with qualified professionals or experts in the respective fields for specific advice or guidance. Any actions taken based on the information contained in our blog articles are solely at the reader's discretion and risk. We do not assume any responsibility or liability for any loss, damage, or adverse consequences incurred as a result of such actions.
We may occasionally provide links to external websites or resources for further information or reference. These links are provided for convenience and do not imply endorsement or responsibility for the content or accuracy of these external sources. Our blog articles may also include personal opinions, views, or interpretations of the authors, which do not necessarily reflect the views of our organisation as a whole. We encourage readers to verify the accuracy and relevance of information presented in our blog articles and to seek professional advice when needed. 
Your use of this website and its content constitutes acceptance of this disclaimer.
 

Reference: 
https://ringgitplus.com/en/blog/personal-finance-news/bnm-cuts-opr-to-2-75-what-it-means-for-your-money.html
https://www.reuters.com/world/asia-pacific/malaysia-central-bank-lowers-key-rate-275-weaker-growth-outlook-2025-07-09
https://www.reuters.com/world/asia-pacific/malaysia-central-bank-expected-cut-rates-first-time-five-years-2025-07-07
https://www.bnm.gov.my/monetary-stability
https://en.wikipedia.org/wiki/Overnight_policy_rate