THE government must introduce a blanket moratorium on all bank loans following Bank Negara Malaysia’s (BNM) recent decision to hike the overnight policy rate (OPR), Zuraida Kamaruddin said.

The Parti Bangsa Malaysia (PBM) president-elect said the OPR increase, the fourth this year, has burdened businesses and individuals, whom she claimed are just recovering as the country started to transition to the endemic stage of the Covid-19 virus.

“While we understand the hike is in response to creeping inflation and is in line with the actions of central banks in other countries, the decision has also resulted in a more challenging environment for businesses,” Zuraida said.

“We PBM leaders have received numerous complaints from the corporate sector, particularly small and medium enterprises (SMEs),” the plantation industries and commodities minister said.

“Many are facing cash flow difficulties and have barely turned their business around since April 1, when the country started to transition into the endemic stage,” she said in a statement.

BNM’s November 3 announcement of the increase in OPR is the country’s fourth consecutive interest rate hike since May this year, a move that the central bank’s monetary policy committee explained as a further adjustment to monetary easing.

The central bank said the committee also decided at its last meeting of the year that the corridor-top and bottom limits of the OPR would be raised accordingly to 3% and 2.5%, respectively.

Although all economic sectors have now reopened, Zuraida claimed Malaysia is still far from pre-pandemic levels.

“The war in Ukraine, disruption in the global supply chain and climate change have only worsened the situation. This is inevitable considering Malaysia is a global trading nation.

“We have also received feedback that many businesses had re-structured their loans on the assumption that the economy would rebound.

“However, this does not appear to be the case. Even the World Bank has recently revised Malaysia’s 2023 growth target from 4.5% to 4.2%.

“This is why we believe a moratorium can be a critical lifeline for businesses, particularly during such challenging times,” she said.

Zuraida said economists have validated the success of Malaysia’s moratorium plans in the past and claimed to be confident that it would have the same impact now.

“Malaysian banks have proven to be resilient, having made respectable profits even at the height of the pandemic.

“They are financially more than healthy enough to absorb any shocks that may arise due to the moratorium,” she added. – November 9, 2022.