Quarterly Market Outlook
Malaysia – and the world – has indeed been through a lot over the last few months. The COVID-19 pandemic and subsequent Movement Control Order (MCO) has affected businesses of all sizes. As a result, many of us have lost our jobs or have seen pay cuts. As at end June 2020, 773,200 Malaysians, or 4.9% of the workforce, is currently unemployed. This number is expected to increase as more employers start carrying out separation schemes as a last resort.
Even though some of us may have lost our jobs, we still have debts to repay. The mandatory six-month moratorium, which has helped alleviate the burden of those impacted by the economic environment, will come to an end on September 30, 2020. As at Aug 28, the value of the loans under moratorium stood at RM81.9 billion. After much discussion with banks, the government has ruled out a mandatory extension and has instead encouraged banks to come up with their own initiatives to help their customers.
Although it is encouraged to resume repayments as soon as the moratorium ends to avoid accumulation of interest and prolonging your loan tenure, some circumstances are beyond your control. So, how can you manage your repayments after the moratorium?
Fortunately, banks have taken it upon themselves to help their customers overcome this particularly trying period. You can also ask Agensi Kaunseling dan Pengurusan Kredit (AKPK) for assistance, at no cost. There is always hope, and you should not be afraid to ask for help.
Now is the time to reassess your current financial situation and reach out to us at RHB if you need assistance. Even if you are currently employed, but foresee potential changes in income in the near future, planning ahead will help you tremendously.
While markets digest the daily drivers of FX moves, net short USD positions seem to be accumulating each week, signaling that the bearish trend for the Dollar is not going away anytime soon. Net bearish bets on the USD grew to their largest since May 2011, and FX spot trading in recent days suggest the position has only grown further since (see Chart 1). Speculators’ net bearish bets on the USD grew in the latest week (can we insert an “as at date” here? as of 14th August ) to the largest bearish position in the last 9 years, according to U.S. Commodity Futures Trading Commission data. Dollar positioning posted a net short of $32.23 billion, up from a net short position of $28.87 billion a week earlier. Extended short dollar positions risk a sharp pull back if the Dollar downside stalls further, but for now the negatives for the Dollar are mostly still in place.
Your bank may grant a three-month deferment (on a case-by-case basis) to help ease the burden of managing your repayments until you get back on your feet, if you are currently unemployed or are experiencing a loss of job. Take note that although repayments will be suspended, interest/profit will still accrue and add to your total outstanding balance.
If your monthly income has been reduced, inform your bank, so they can help you restructure your repayments to better suit your current income.
An example of restructuring would be to convert your credit card outstanding balance to a term loan with a lower interest/profit rate.
Under rescheduling, the loan tenure will be extended and the monthly instalment amount revised to reflect the new tenure.
To apply for assistance from the bank, you will need to provide your letter of termination/salary reduction from your employer. You can fill up the application form and submit your supporting documents online.
If your application is approved by the bank, your CCRIS rating will not be affected, provided the bank receives your application before June 30, 2021. So, act now and don’t wait until it is too late!
Another option is to approach AKPK for assistance. AKPK is fully-owned by Bank Negara Malaysia, and its services are free with the intention of helping Malaysians better manage their finances.
With AKPK, you will be placed under its Credit Management Program (PPK) and the agency will help you with the following:
1) Reschedule your repayments to suit your current income
2) Consolidate all your borrowings with various banks into one easy repayment amount. AKPK will then channel the funds to the respective banks.
3) Provide protection from debt collection agencies for your peace of mind.
AKPK provides assistance to all individual borrowers or sole proprietors with a total exposure of less than RM5 million, as long as you have not been declared bankrupt. Your debt can be with conventional or Islamic banks, credit card providers and non-bank credit services such as AEON.
Once you’ve signed up with AKPK, the agency will act as an intermediary between you and your bank, and your debt will be consolidated according to the parameters agreed upon by both AKPK and your bank.
AKPK also provides tele-counselling services to help you go over your financial situation and offer solutions.
To apply for assistance from AKPK, visit their website to set up an account, where you will need to fill in all the details of your borrowings and other relevant information. You can then set an appointment with a counsellor to discuss your options.
Ultimately, financial responsibility means living within your means. So, take a close look at your financial situation, evaluate your earnings and spending habits and make necessary adjustments to put yourself on responsible financial footing. We believe that we can move beyond this challenging period and on to better things together. To regain control of your finances during these times, visit your nearest RHB branch or call us at 03-9206 8118.
Get in touch with RHB Premier today.
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