KUALA LUMPUR, Feb 28 — Banks in Malaysia have maintained sufficient liquidity to support intermediation and meet exigent needs, Bank Negara Malaysia (BNM) said in its "Monthly Highlights-January 2019” report released today.

BNM said the country’s banking system liquidity coverage ratio (LCR) stood at 144.3 per cent, with all banks recording LCR levels above 100 per cent.

The Basel III LCR has been phased in since June 2015, with initial compliance set at 60 per cent and progressive increments of 10 per cent each year.

As of Jan 1, 2019, the minimum requirement was set at 100 per cent.

"The funding profile of the banks was broadly stable, with the loan-to-fund ratio and the loan-to-fund and equity ratio standing at 83.3 per cent and 72.5 per cent, respectively,” it said.

Meanwhile, the central bank said the performance in the domestic financial markets was mixed, with the ringgit appreciating by 1.2 per cent against the US dollar in January 2019, while the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) declined 0.4 per cent in the same period.

It said the appreciation of the local note against the greenback was driven mainly by non-resident portfolio inflows amid expectations for a slower pace of the United States’ monetary policy normalisation.

Meanwhile, BNM attributed the weakness in the FBM KLCI to weaker sentiments in the industrial products and services sector amid concerns over volatile commodity prices, including crude oil and alumina.

"The five-year Malaysian Government Securities’ yield declined by 2.5 basis points, in line with the downward trend in regional bond yields,” it added.

BNM said net financing continued to expand by 5.9 per cent in January 2019 (December 2018: 6.3 per cent) amid continued moderation in the growth of outstanding corporate bonds, which grew 7.3 per cent in January 2019 (December 2018: 8.0 per cent).

"Outstanding business loan growth moderated to 4.8 per cent in January 2019 from 5.4 per cent in December 2018, mainly in the construction, finance, insurance and business services, and real estate sectors, while growth in outstanding household loans was sustained at 5.5 per cent in the same month from 5.6 per cent in the previous month,” it said.

Net financing refers to outstanding loans of the banking system, excluding development financial institutions, and outstanding corporate bonds. — Bernama