KUALA LUMPUR, May 30 — Malaysia’s headline inflation was lower at 3.4 per cent in April when compared to the annual per centage change of 3.5 per cent in March on lower food inflation.

Inflation in the food and non-alcoholic beverages category moderated to 3.6 per cent from 3.9 per cent in March, Bank Negara Malaysia said in a statement.

This largely reflects the significant price increase for fresh chickens in the corresponding month of last year.

The lower food inflation was, however, partially offset by higher inflation in the transport category of 5.3 per cent (March: 5.1 per cent) following higher car repair and servicing costs during the month.

In terms of Interbank rates, Bank Negara stated that they were on average stable in April.

The three-month interbank rate, however, traded higher during the month as the preference of interbank lenders shifted mainly towards shorter-term lending.

In terms of retail lending rates, the average base lending rate (BLR) of commercial banks remained unchanged at 6.53 per cent.

Retail deposit rates were also relatively stable during the period.

On an annual basis, broad money or M3 growth increased slightly to six per cent in April.

The expansion in M3 was mainly on account of credit extension to the private sector by the banking system and higher net claims on the government.

Net financing to the private sector grew at a stable pace of 9.5 per cent in April, amidst a slight moderation in the growth of outstanding banking system loans and a higher growth in net issuances of private debt securities (PDS).

While the growth of outstanding business loans moderated slightly following higher repayments during the month, the level of loans disbursed to businesses remained healthy.

Nevertheless, there was a gradual moderation of household loans growth from 12 per cent in December 2013 to 11.6 per cent in April 2014.

Overall loans demand moderated with lower loan applications from the business sector.

In the banking system, the level of net impaired loans was sustained at 1.3 per cent of net loans, while the loan loss coverage ratio was above 100 per cent.

In April, the ringgit exhibited a mixed performance against the currencies of Malaysia’s major trade partners.

Between May 1-16, the ringgit strengthened against the currencies of Malaysia’s major trade partners.

The international reserves of Bank Negara Malaysia amounted to RM427.6 billion (equivalent to US$131.1 billion) as at 15 May 2014, sufficient to finance 9.2 months of retained imports and is 1.3 times the short-term external debt. — Bernama