AmBank not expecting more interest rate cuts

KUALA LUMPUR: Financial services provider AmBank Group does not expect anymore interest rate cuts 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 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.

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’ overnight policy rate (OPR) cut in May.

“(Bank Negara’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.

Bank Negara has announced its decision to retain the OPR at 3% 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 6% market share. — Bernama

Source: TheStar