Lower BLR bad news for some

GEORGE TOWN: While housebuyers welcome a lower base lending rate (BLR), senior citizens and welfare homes are concerned over their dipping income in the wake of higher living expenses.
Colleagues Lulu Goh and Carene Tang, who are in their 20s, said a lower BLR meant they could spend the extra cash for other purposes.
“It is good news for those with housing loans but I am quite cautious with my daily expenses now.
“I do not intend to keep my money in fixed deposits because the returns are very low,” Goh said.
Factory facility manager T. Pani said the anticipated reduction in BLR was good as it would help alleviate loan commitments but getting less returns from fixed deposits would discourage people from saving more.
“Those in the private sector put in their money as a long-term plan and the interest is their only income after retirement.
“The Government should not zoom in on the people to spend their money to stimulate economic growth. We have to be cautious with our expenses especially during this period of uncertainty,” he said.
Society of Active Generation of Elders (SAGE) president Chin Sek Ham said although the reduction in BLR was aimed at stimulating the country’s economy, the income of senior citizens dropped each time the BLR went down.
“The Government should come up with a formula to help senior citizens and welfare organisations who are affected by the current low rates in fixed deposits,” he said.
“With the minimum 3.5% per annum interest set for fixed deposits, a retiree will earn less than RM150 monthly if he saves about RM50,000 in the bank. As it is, we are stretching the ringgit because prices of goods are going up,” Chin said.
“Since we are in our sunset years, medical expenses are also increasing. Many of us rely on government hospitals but the queue is so long you could end up blind even before you are treated for cataract,” he said.
Chin said the low interest rate would also affect the operations of many non-governmental organisations like SAGE as public donations also dwindled.
An official of a welfare home here said the home’s monthly operational costs had increased from RM80,000 last year to RM100,000 this year and the low interest rate from fixed deposit could not help support the expenses.
“We have to buy our own sugar, cooking oil and rice supplies now because public donations are getting less. People are thinking twice before making donations,” he said.

By ZARINAH DAUD, The Star