OPR hike necessary to strengthen ringgit, says PM Anwar

KUALA LUMPUR, June 6 — Prime Minister Datuk Anwar Ibrahim today called on the Opposition parties to accept his government’s decision to raise the overnight policy rate (OPR) as it will help strengthen the Malaysian currency.

He said the Singapore dollar became stronger after the republic raised its OPR.

“OPR, as we know since Barisan Nasional and Perikatan Nasional, has been decided by Bank Negara Malaysia. That is a law fixed by previous MPs.

“Except now, in the unity government it has been raised once,” he said during the Prime Minister’s Question Time in the Dewan Rakyat.

In comparison, he said the OPR went up four times under the previous government.

“So for now, I have urged BNM to not only monitor monetary issues but also the overall fiscal strength,” he said, referring to the central bank.

“We have to accept the OPR hike. As what was done in Singapore, it helped strengthen the currency,” he added.

Anwar was replying to Putrajaya MP Datuk Mohd Radzi Md Jidin who wanted to know the impact from the depreciation of the ringgit on Malaysia’s economic recovery post-pandemic and the government’s efforts to strengthen its currency.

The Opposition lawmaker also asked about the impact of subsidy reductions on living costs, and the possibility of another OPR hike.

Anwar replied that the subsidies were not removed wholly, but only for those in the top 20 percentile income bracket, also known as the T20 group.

“When you mention reduction of subsidies, I don’t understand where it was reduced.

“What was reduced was for the wealthy. We reduced electricity subsidies for the very wealthy who have big houses.

“Why do we want to make this a political issue?“ Anwar asked. He said 90 per cent of Malaysians were not affected by the rise in electricity tariffs, asserting that small-medium enterprises and food industries are also not affected.

“Who are those who want to be heroes? And for the haj we did not raise it for the rakyat, it has only been raised for the T20.

“You are already wealthy, why do you want Tabung Haji to subsidise your travel to Mecca?” he asked Radzi.

Anwar who is also finance minister said the had been complaints but that his government did not roll back other subsidies apart from those he listed.

“Why is it being spread in political campaigns that there was a reduction in subsidies? We can’t even reduce from the wealthy? We cannot take RM50 million and RM60 million from Tan Syed Mokthar?” Anwar asked, referring to billionaire Tan Sri Syed Mokhtar Syed Albukhary who is listed by Forbes magazine as Malaysia’s 11th richest man in its latest edition.

Anwar also said that he had no choice but to take from the wealthy to give to the poor.

Last month, Anwar said the increase in OPR was not to benefit any party and is not part of the Monetary Policy Committee's deliberation.

He said although banks may benefit from loan repayments when the OPR increases, they would also have to pay higher interest rates, which increases their funding costs.

He also said this was to ensure the country's economy continues to grow at a sustainable rate and to control inflation.