Overnight Policy Rate
Encyclopedia
Overnight Policy Rate is an overnight interest rate
set by Bank Negara Malaysia
(BNM) used for monetary policy direction. It is the target rate for the day-to-day liquidity operations of the BNM. Overnight Policy Rate (OPR) is the interest rate at which a depository institution lends immediately available funds (balances within the central bank) to another depository institution overnight. This is an efficient method for banks around the world to practice 'Accessing short-term financing' from the central bank depositories. The interest rate of the OPR is influenced by the central bank, where it is a good predictor for the movement of short-term interest rates.
In Malaysia, changes in the OPR trigger a chain of events that affect Base Lending Rate (BLR), short-term interest rates, fixed deposit rate, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services which is the micro and macro factors on the economic. The BLR is usually adjusted at the time in correlation to the adjustments of the OPR which is determine by Bank Negara Malaysia (BNM) during Monetary Policy Meeting.
Overnight rate
The overnight rate is generally the rate that large banks use to borrow and lend from one another on the overnight market. In some countries , the overnight rate may be the rate targeted by the central bank to influence monetary policy...
set by Bank Negara Malaysia
Bank Negara Malaysia
Bank Negara Malaysia is the Malaysian central bank. Established on January 26, 1959 as the Bank Negara Malaya, its main purpose was to issue currency, act as banker and adviser to the Government of Malaysia and regulate the country's credit situation...
(BNM) used for monetary policy direction. It is the target rate for the day-to-day liquidity operations of the BNM. Overnight Policy Rate (OPR) is the interest rate at which a depository institution lends immediately available funds (balances within the central bank) to another depository institution overnight. This is an efficient method for banks around the world to practice 'Accessing short-term financing' from the central bank depositories. The interest rate of the OPR is influenced by the central bank, where it is a good predictor for the movement of short-term interest rates.
In Malaysia, changes in the OPR trigger a chain of events that affect Base Lending Rate (BLR), short-term interest rates, fixed deposit rate, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services which is the micro and macro factors on the economic. The BLR is usually adjusted at the time in correlation to the adjustments of the OPR which is determine by Bank Negara Malaysia (BNM) during Monetary Policy Meeting.