Net financing growth continues to support economic activity


Malaysia’s net financing growth continued to support economic activity, but moderated to 6.8% in March this year from 7.4% in February.

Bank Negara Malaysia (BNM) said the growth of net outstanding issuances of corporate bonds moderated to 14.2% compared to 16.4% in February, while the banking system’s outstanding loans growth was sustained at 4.4%.

“Business loan growth remained steady at 1.9% in March compared to 2% in February. In particular, the growth of loans to small and medium enterprises increased to 5.8% from 5.4% in the preceding month.

“Household loan growth was stable at 5.6%,” BNM said in its March 2018 monthly highlights.

The central bank said domestic financial markets were affected by volatile global conditions.

In March, BNM said the domestic financial markets recorded positive performance amid easing concerns over uncertainties surrounding the US monetary policy and US-China trade tensions.

On the ringgit, BNM said it appreciated by 1.6% and the five-year Malaysian Government Securities yield declined by 8.1 basis points following non-resident inflows.

“Foreign-exchange (forex) swap volume increased by US$17.9 billion (RM70.63 billion) to US$120.9 billion due mainly to an increase in interbank swap activity, corresponding to quarter- end increase in dollar demand by importers and corporates.

“This led to one-month implied dollar funding cost via forex swaps increasing by two basis points to 2.31% as of end- March and the average one-month US dollar/ringgit swap points correspondingly declining three points to 40 points,” it said.