KUALA LUMPUR: Headline inflation, as measured by the annual percentage change in the consumer price index (CPI), moderated to 2.6% in March from 4.2% in February, reflecting lower fuel prices during the month, said Bank Negara Malaysia (BNM).
It said the price of RON95 petrol was reduced by 15 sen to RM1.60 per litre in March 2016 from RM1.75 in February.
“As a result, inflation in the transport category declined significantly in March 2016 to -8.2% (February: 3.6%),” the central bank said in a statement.
Commenting on the country’s monetary condition, BNM said interbank rates continued their moderating trend in March following the reduction of the statutory reserve requirement by 50 basis points on Feb 1, 2016.
The base rate of commercial banks, on average, remained relatively stable at 3.89% in March (February: 3.88%).
Meanwhile, the banking system remained well-capitalised with the common equity tier 1 capital ratio, tier 1 capital ratio and total capital ratio at 13.0%, 13.9% and 16.5% respectively.
The level of net impaired loans was sustained at 1.2% of net loans, with loan loss coverage ratio stable at 94.3%.
As for exchange rates and international reserves, in March, the ringgit appreciated against the currencies of Malaysias major trade partners.
During the month, the local note, along with other regional currencies, appreciated against the US dollar, mainly due to expectations that the increase in US interest rates would be deferred, which led to increased investments into regional financial markets.
“The ringgit’s strengthening was also due to the higher global crude oil prices for the month,” it said.
The international reserves of BNM amounted to RM382.1bil (equivalent to US$97.2bil) as at April 15, 2016, sufficient to finance 8.1 months of retained imports and was 1.1 times the short-term external debt. - Reuters
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