About the Overnight Policy Rate (OPR)

Yesterday night, the Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM, central bank of Malaysia) has again decided to keep the Overnight Policy Rate (OPR) unchanged at 3.50%. This position has been maintained since 26 April 2006 after rising by 25 basis points from the previous 3.25%.

You might want to know exactly what is OPR? Why is it important? How does it affect us?

On 23 April 2004, BNM introduced a New Monetary Operating Procedures with a new interest rate framework. Under this New Monetary Operating Procedures, the Overnight Policy Rate (OPR) will be the indicator of the monetary policy stance of Bank Negara. The OPR will have a dual role:

• As a signalling device to indicate the monetary policy stance;
• As a target rate for the day-to-day liquidity operations of the Central Bank.

Any change in the monetary policy stance would be signalled by a change in the OPR. It will serve as the primary reference rate in determining other market rates, such as the Overnight Interbank Rate (OIR), Base Lending Rate (BLR), deposit rate, etc.

Liquidity management of Bank Negara will aim at ensuring the appropriate level of liquidity that would influence the OIR to move close to the OPR. Liquidity operations will also be conducted at other maturities but without targeting a specific interest rate level as well. Therefore, interbank interest rates at other maturities would be market determined, reflecting overall demand and supply conditions in the money market as well as interest rate expectations.

To minimize excessive volatility in the overnight rate, Bank Negara specifies a corridor around the OPR, which set at ± 25 basis points around the OPR. A standing facility is introduced to ensure that the overnight interbank rate fluctuates within this corridor by providing a lending facility at the upper limit of the operating band and a deposit facility at the lower limit of the operating band. The MPC will announce the OPR on a quarterly basis, unless there is emergency change in the monetary policy stance, whereby additional OPR statement will be issued.

With the OPR set at 3.50%, the upper limit will be 3.75% and lower limit will be 3.25%. Interestingly, you might have noticed that the BLR of banks is set 3% more than this upper limit, and short term fixed deposit rate is set close to the lower limit, while long term fixed deposit rate (1 year or above) is set close to the upper limit.

In fact, under the new framework, each banking institution can announce its own BLR based on its cost structure and business strategies. Banking institutions are also no longer be subject to the maximum spread of 2.5 percentage points above BLR. As a result, you might have noticed that the BLR of certain bank is a little bit different from the majority counterparties.

In summary, the OIR will move in accordance to the OPR. As a result, the banks' BLR and deposit rates are also expected to move accordingly.

When the OPR is low, more money is released to flow into the market, and expected to stimulate the economic activities. On the other hand, when the OPR is high, more money will flow back to Bank Negara, and expected to slow down the economic activities. This is seen as a way to control the inflation rate.

About Cloud Computing

If you are in the IT world, you'd probably heard about Cloud Computing, which is apparently a buzzword frequently mentioned by Gartner since 2007, and spread over the global IT industry nowadays. It is emerging at the convergence of 3 major trends nowadays, namely service orientation, virtualization and standardization of computing through the Internet.

Gartner defines Cloud Computing as a style of computing where massively scalable IT-related capabilities are provided “as a service” using Internet technologies to multiple external customers. This term derives from the normal practice in network drawing whereby the Internet is always presented as a cloud symbol in the diagram.

With Cloud Computing, the computing resources will be consolidated from various data center locations linked up together in the cloud, and will be delivered to consumers on a service subscription basis, allow access from anywhere and provide economies of scale. The concept is similar to utility services that we all are familiar with, such as the electricity.

Consumers of Cloud Computing services purchase the required computing capacity on-demand, and are not generally concerned with the underlying technologies used to achieve the increase in server capability. The types of IT services that can be provided through a cloud are wide-reaching, and have now expanded past web applications to include storage, raw computing, or access to any number of specialized services.

Notable Cloud Computing service providers include:

• Amazon - Amazon Web Services
• Google - Apps engine
• IBM - Blue Cloud
• Nirvanix - Storage Delivery Network

Redhat and Elastra also provide cloud computing based on the Amazon Web Services.

To date, there are still a lot of confusion around this buzzword, and Gartner has clarified the following to be myths about Cloud Computing and should not be taken as true:

• Myth No. 1: Cloud computing is an architecture or an infrastructure.
• Myth No. 2: Every vendor will have a different cloud.
• Myth No. 3: Software-as-a-Service (SaaS) is the cloud.
• Myth No. 4: Cloud computing is a brand new revolution.
• Myth No. 5: All remote computing is cloud computing.
• Myth No. 6: The Internet and the Web are the cloud.
• Myth No. 7: Everything will be in the cloud.
• Myth No. 8: The cloud eliminates private networks.

Cloud Computing is a promising approach for highly scalable integrated computing service. It is still in its early stage now, and might take a few years to be matured.

OSIM OS-3200 iCare 200 Eye Massager

I redeemed this OSIM OS-3200 iCare 200 Eye Massager with my Citibank Rewards Points recently. The delivery was very efficient, as it reached my house within 2 days time right after the redemption was made through Citibank Online website.

The function of this electronic eye mask is to massage and exercise the eyes. I find it effective in relieving the eye strain and tiredness.

It is very lightweight, easy to carry, and operates with the remote control with 4 AA size Alkaline batteries. It doesn't use household electricity and doesn't have a power plug.

Its 3 main massaging features are: air pressure, heat and vibration. It also contains magnetic nodes said to be able to improve circulation around the eye area and enhancing the massage effectiveness.

There are 4 modes of air pressure, 2 modes of heat selection, 6 modes of vibration. It comes with 1 automatic massage program, and 6 manual massage modes. Selectable massage time are 5, 10 and 15 minutes. I find the default 15 minutes massage time is quite long. If you are impassion, better select a shorter time period.

I have also seen this product appeared in Maybank TreatsPoints reward list before. If you plan to redeem your points, probably can consider this as well.