On the 17th July 2014, the Bank Negara of Malaysia (BNM) has finally made a move to revised the overnight policy rate (OPR), hence changing the base lending rate (BLR) to 6.85% from 6.6%. The last revision was made in 2012. The BLR changes made by the BNM for the past 25 years could be refer to the graph below BLR (1989 - 2014) by BNM.
As shown in the graph, the rates was highest at 10.50% in 1998 due to recession (it actually peaked at 12.27%). There are some years where changes are made up to 3 times a year, however the graph reflect only the percentage that was used most for the year.
The changes of OPR caused uncertainty to the final lent amount. In the event of base financing rate (BFR) i.e. Islamic financing, the final amount will not exceed the final agreed amount financed. The BFR will definitely change upon any amendment to the OPR, however the uncertainty of final amount to be paid is not an issue.
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