AmBank not expecting interest rate cut

KUALA LUMPUR, Financial services provider AmBank Group does not expect any more interest rate cut if the economic climate continues to improve.

Group chief executive officer Datuk Sulaiman Mohd Tahir said business and investment momentum had picked up in the previous quarter and money was seen flowing in as a result of an improved economic climate.

“If improvements continue to be seen in terms of the investment and economic climate, I don’t know if you’d want to do a further rate reduction because money would flow out if the rates are too low,” he said.

He was speaking to reporters after launching AmBank UnionPay Platinum Credit Card here today.

He said the whole idea of an interest rate reduction is to stimulate economic growth, which had been slow in the previous quarter or at least in the first quarter prior to Bank Negara Malaysia’s overnight policy rate cut in May.

“(BNM’s OPR decision) is to encourage spending, but the other thing is to ensure that it is not so low as to make it unattractive to keep the money here,” he added.

Yesterday, BNM announced its decision to retain the OPR at three per cent after a cut of 25 basis points in May this year.

Meanwhile, Sulaiman said the newly launched card is expected to contribute at least one-third of new card issuance in the next 12 months.

He said AmBank is the country’s first local bank to partner with UnionPay, a global payment network, on a credit card collaboration.

He said the card, aimed at the fast-growing segment of Malaysian travellers, would leverage on UnionPay’s strong global presence and access to UnionPay’s exclusive deals and global privilege programme.

Currently, Ambank’s card issuance stands at 550,000, making it the fourth largest issuer among local banks with a six per cent market share.

Source: BERNAMA (News Agency)