Bank Negara: Malaysia's banking system liquidity remains healthy in May
KUALA LUMPUR: Banking system liquidity position remained healthy in May to support financial intermediation, said Bank Negara Malaysia (BNM).
In its Monthly Highlights report for May, the central bank said the banking system maintained robust liquidity buffers, with an aggregate liquidity coverage ratio of 150.4 per cent (April 2025: 156.1 per cent).
"The aggregate loan-to-fund ratio increased slightly to 83.6 per cent (April 2025: 83.3 per cent), driven by sustained loan growth,' it said.
BNM also noted that asset quality in the banking system remained intact.
"The gross impaired loans ratio rose marginally higher to 1.5 per cent in May (April 2025: 1.4 per cent), while the net impaired loans ratio remained stable at 0.9 per cent.
"The loan loss coverage ratio, including regulatory reserves, remained prudent at 128.9 per cent of gross impaired loans (April 2025: 131.1 per cent),' it said.
Credit growth to the private non-financial sector also remained sustained.
BNM said credit to the private non-financial sector grew by 5.4 per cent in May, unchanged from April 2025, supported by higher growth in outstanding business loans (5.0 per cent; April 2025: 4.4 per cent), even as growth in outstanding corporate bonds moderated (4.7 per cent; April 2025: 5.5 per cent).
"Growth in business loans increased to 5.0 per cent (April 2025: 4.4 per cent), mainly due to higher working capital loan growth, particularly among the non-small and medium enterprises, while investment-related loan growth remained steady across segments.
"Household loan growth remained stable at 6.0 per cent (April 2025: 6.0 per cent), supported by sustained growth across most loan purposes," BNM said.
On domestic financial markets, BNM said developments continued to be mainly influenced by evolving United States (US) tariff policies.
"Global financial conditions eased in May following the US administration's announcement of a 90-day truce. However, investors remained cautious due to lingering uncertainties surrounding tariffs and ongoing concerns over a potential global economic slowdown,' it said.
BNM also reported that both headline inflation and core inflation were lower in May.
"Headline inflation moderated to 1.2 per cent (April 2025: 1.4 per cent), while core inflation eased to 1.8 per cent (April 2025: 2.0 per cent),' it said.
The decline in headline inflation was largely attributed to selected non-core items, such as fresh vegetables and petrol, in line with lower commodity prices. The moderation in core inflation was mainly driven by lower inflation for rental and streaming services.
On the production side, BNM noted stronger growth in the manufacturing sector.
"The manufacturing Industrial Production Index recorded strong growth of 5.6 per cent in April (March 2025: 4.0 per cent).
"Export-oriented clusters expanded by 6.4 per cent in April (March 2025: 4.8 per cent), supported by higher production of electrical and electronics, as well as consumer-related items such as vegetables, animal oils and fats,' it said. - Bernama
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
Five, including a datuk, charged with illegal deposit taking
SHAH ALAM: Five individuals, including a woman with the title of 'Datuk', were charged with taking deposits without a valid license and money laundering for four years at a Sessions Court on Tuesday (July 1). Datuk Suhaila Semaru, 41, her sister, Suraya Semaru, 37, brothers Muhammad Wahbah Az-Zuhaili Mohd Ariffin, 33, Muhammad Syaabil Ajwad Mohd Ariffin, 26, and Mohamad Noor Syauqi Shafiee, 30, plead not guilty and requested for trial when the charges were read to them separately in front of Judge Muhamad Anas Mahadzir. Suhaila as XFOX Market Sdn Bhd director faces 22 counts of receiving, obtaining and owning an estimated RM13mil from the illegal activities, while Suraya as chief executive officer faces 10 charges of obtaining, owning and transferring a total of RM11.1mil in funds. Mohamad Noor Syauqi is charged with obtaining and owning RM2.5mil from illegal activities, Muhammad Wahbah Az-Zuhaili faces seven charges of receiving, obtaining and using RM10.3mil, while Syaabil Ajwad faces seven charges of receiving and one charge of disposing of RM58mil of funds from illegal activities. They allegedly committed the offences under Section 4(1)(b) of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, punishable under subsection 4(1) of the same Act, at various bank branches around Shah Alam, Petaling Jaya and Subang between November 2021 and July last year. At the same proceeding, Suhaila, Suraya and Mohamad Noor Syauqi pleaded not guilty to another charge of agreeing to accept deposits from the public without a valid licence. They are charged with committing the offence at the XFOX office in Subang Bestari from Nov 12, 2021 to July 30, 2024, under subsection 137(1) of the Financial Services Act 2013, read together with subsection 249(1)(a) and punishable under Section 137(2) of the same Act. The prosecution, led by Nurdeenie Abd Rashid and Megat Mahathir Megat Tharih Afendi, suggested RM1mil in bail for all the accused with the condition that they surrender their passports while lawyer Mohd Haziq Dhiyaudin Razali requested a reduction, pointing out that his clients cooperated fully with Bank Negara Malaysia during the investigation and had no risk of flight. Muhamad Anas allowed bail of RM100,000 for each of the accused with the condition of one surety and that their passports would be surrendered till the end of the case and set case re-mention for Aug 6. - Bernama
The Star
3 hours ago
- The Star
Ringgit rises to nine-month high on bond inflows, weaker dollar
Malaysia's ringgit advanced to the strongest level in nine months against the dollar, buoyed by foreign bond inflows and a broad weakness in the US currency. The ringgit climbed as much as 0.7% to 4.1805 per greenback, a level last seen in October. The currency has rallied in recent weeks amid signs the global trade war is easing, boosting sentiment for the export-dependent economy. Meanwhile, global funds poured $2.9 billion into Malaysia's bonds in May, according to Bank Negara Malaysia's latest data, the largest monthly inflow since October 2013. "We expect the ringgit to find support from a weaker dollar,' said Lloyd Chan, FX strategist at MUFG Bank Ltd. "Ringgit bonds have also been in high demand, supporting increased foreign participation in the local government bond market.' MUFG forecasted the ringgit to rise to 4.11 per dollar by end-2025, he added. Gains in the nation's assets have been driven by signs that trade agreements with as many as a dozen of America's largest trading partners are expected to be completed by the July 9 deadline. A trade truce between the US and China, the top two destinations for Malaysian exports according to 2024 data from the International Monetary Fund, has also lifted optimism. An index of dollar strength fell over 2% in June, its sixth straight decline, on bets of Federal Reserve interest rate cuts and concerns over the widening US fiscal deficit. - Bloomberg
The Sun
6 hours ago
- The Sun
Over 22,000 traders register for e-wallets via ReDI initiative in Malaysia
PAPAR: The Ministry of Domestic Trade and Cost of Living (KPDN), through its Retail Sector Digitalisation Initiative (ReDI), has helped 22,368 traders nationwide register for e-wallet services, since the programme was launched in August 2022, up to May this year. Its Minister Datuk Armizan Mohd Ali said the figure far exceeded the 12th Malaysia Plan's target, of 15,000 registered traders by this year. 'From Jan 1 to May 31, 2025, a total of 3,229 traders nationwide registered under ReDI. Of this, 1,120 were from Sabah and 1,799 from Sarawak,' he said. He said this after flagging off the Sabah Zone-level ReDI Roadshow 2025, here, today. Armizan added that the ongoing 10-day Borneo ReDI Roadshow 2025, organised by KPDN - kicked off on June 26 in Sematan, Sarawak, and is scheduled to conclude on July 5 in Tawau, Sabah. He said the organisation of the Borneo ReDI Roadshow 2025 is a proactive move by KPDN, to raise awareness among rural traders about operating digital-based businesses. 'The main focus is to promote the use of e-wallets for purchase transactions, and to foster a cashless society, especially in rural areas,' he said. 'The ReDI initiative offers efficient financial management, business development opportunities, a variety of payment options, and more effective inventory control that traders can leverage,' he added. Armizan added that the initiative is supported through strategic collaboration with partners, such as Bank Negara Malaysia, PayNet, and registered e-wallet providers, including Touch 'n Go eWallet, GrabPay, ShopeePay, MAE by Maybank, Boost, and SPay Global. 'As of the fifth day of the ReDI Borneo Roadshow 2025, a total of 3,708 traders in Sabah and Sarawak have registered,' he said.
