Financial institutions well-placed to withstand macroeconomic shocks

FILE PHOTO: A general view of the headquarters of Malaysia's central bank, Bank Negara Malaysia, in Kuala Lumpur January 29, 2013. REUTERS/Bazuki Muhammad/File Photo

KUALA LUMPUR: Financial institutions are well-positioned to withstand macroeconomic and financial shocks, with excess capital buffers of RM138.2bil as at April 2018, Bank Negara Malaysia (BNM) said.

The slight moderation in capital adequacy ratios between March and April 2018 was largely attributable to the payment of dividends by banks and the maturity of capital instruments, it said in its April 2018 monthly highlights statement today.

The central bank said headline inflation was at 1.4% in April on a year-on-year (y-o-y) basis compared with 1.3% in the previous month.

“The transport category registered higher inflation of 0.4% (March: -1.5%). Despite broadly stable domestic fuel prices compared to March, the y-o-y increase was larger than that in the previous month.

“The impact from higher transport inflation was partially mitigated by food inflation, which moderated further to 2.6% following lower prices for vegetables and fish and seafood (March: 2.8%),” it said.

BNM said the overall industrial production index sustained its growth at 3.1% in March (February: 3.0%), amid a rebound in mining and electricity output, despite a moderation in manufacturing output.

It said domestic financial markets remained orderly in April despite non-resident portfolio outflows stemming from cautious investor sentiments following rising US Treasury yields and uncertainties leading up to the 14th General Election.

“As a result, the ringgit depreciated by 1.6% against the US dollar and the five-year MGS yield increased by 24.5 basis points. The FBM KLCI, however, increased by 0.4% to 1,870.4 points, supported by higher crude oil prices and easing global geopolitical tensions,” it added. - Bernama