KUALA LUMPUR: On an annual basis, Malaysia’s broad money (M3) grew by 2.7% in December last year, driven mainly by the extension of credit to the private sector by the banking system.
In a statement on Friday, Bank Negara Malaysia (BNM) said the expansion, however, was partially offset by the decline in net foreign assets.
The M1 and M2 also expanded by 4.1% and 2.9% on annual basis last month as compared with 6.5% and 4% respectively in November.
M3 is measure of money supply. It comprises M1 - money in circulation and cash on deposits in banks as well as M2 - plus time, savings and foreign currency deposits.
Net financing to the private sector grew by 8.6% in December versus 8.4% in November, driven by higher growth in net outstanding issuances of private debt securities amid a moderation in the growth of banking system loans.
The growth of outstanding business loans moderated to 8% during the month compared with 8.7% in November, the level of loans disbursed to businesses continued to remain healthy with larger volume of loans extended across most sectors.
Loans to households also registered a marginally slower annual growth of 7.7% compared with 7.8% in November.
“Although loan applications from both business and household sectors moderated, loan approvals remained strong, especially for the business sector,” it said.
Meanwhile, BNM said, the banking system remained well-capitalised with the Common Equity Tier 1 Capital Ratio, Tier 1 Capital Ratio and Total Capital Ratio at 12.8%, 13.8% and 16.1%, respectively.
The level of net impaired loans was sustained at 1.2% of net loans, with loan loss coverage ratio stable at 96.2%, it said.
The international reserves of BNM amounted to RM408.5bil (US$95.1bil) as at Jan 15, which is sufficient to finance 8.5 months of retained imports and was 1.1 times the short-term external debt. - Bernama
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