KUALA LUMPUR, Nov 28 — On an annual basis, broad money (M3) grew by 5.4 per cent in October, said Bank Negara Malaysia today.
The expansion in M3 was mainly on account of credit extension to the private sector by the banking system, BNM said in a statement on monetary and financial developments for October released here today.
It said interbank rates were relatively stable in October with the average base lending rate of commercial banks at 6.79 per cent with retail deposits rates also broadly unchanged over the period.
Net financing to the private sector grew at a slower pace of 8.6 per cent in October, due to a moderation in the growth of net issuances of private debt securities (PDS) amidst stable growth in outstanding banking system loans, it said.
The annual growth of outstanding business loans increased during the month with a larger volume of loans extended mainly to the construction; manufacturing; and finance, insurance and business services sectors.
The annual growth in outstanding household loans, however, continued to moderate while overall loan demand remained relatively stable with sustained loan applications from households, said the central bank.
Headline inflation was higher at 2.8 per cent in October, mainly reflecting the upward adjustments to prices of RON95 petrol and diesel during the month, which translated into a 5.3 per cent price increase in the transport category.
However, the increase in inflation was partially mitigated by lower inflation in the tobacco sub-category, as well as the slower increase in prices of food at home due to the implementation of the festive season price control scheme by the Government.
Banking system capitalisation remained at strong levels with the Common Equity Tier 1 Capital Ratio, Tier 1 Capital Ratio and Total Capital Ratio at 12.8 per cent, 13.5 per cent and 15.5 per cent, respectively.
In October, the ringgit exhibited a mixed performance against the currencies of Malaysia’s major trade partners.
The local unit, together with other regional currencies, generally depreciated during the month following a sharp increase in global risk aversion, which led to some unwinding of foreign holdings of regional financial assets.
According to BNM, the heightened market uncertainty was mainly driven by concerns over the global growth momentum as the IMF and some national authorities revised their growth outlook lower.
Between November 1 and 16, the ringgit exhibited a mixed performance against the currencies of Malaysia s major trade partners.
The international reserves of Bank Negara amounted to RM414.5 billion (equivalent to US$126.6 billion) as at Nov 14, 2014, sufficient to finance 8.7 months of retained imports and are 1.1 times the short-term external debt. — Bernama
