KUALA LUMPUR: Outstanding business loans grew at a stronger rate of 5.6 per cent in June 2024 compared to 4.8 per cent in May, supported by both working capital and investment-related loans.
Bank Negara Malaysia (BNM), in its monthly highlights released today, said higher loan growth was observed across the construction and services sectors.
It said growth in credit to the private non-financial sector was sustained at 5.4 per cent in June, the same as the previous month, following higher outstanding loan growth of six per cent (May 2024: 5.7 per cent).
Meanwhile, outstanding corporate bonds grew at a more moderate pace of 3.4 per cent (May 2024: 4 per cent).
"For households, outstanding loan growth was steady at 6.2 per cent (May 2024: 6.3 per cent) amid sustained growth recorded across most loan purposes," said the central bank.
BNM noted that the banking system continued to record healthy liquidity buffers with an aggregate liquidity coverage ratio of 155.2 per cent in June (May 2024: 149.7 per cent).
Additionally, the aggregate loan-to-fund ratio remained broadly stable at 83 per cent in June, against 82.2 per cent in May 2024.
The central bank said the United States (US) Federal Reserve (Fed) officials reiterated their patience in allowing its monetary policy to remain restrictive while awaiting further progress on US inflation and the labour market.
In this environment, financial market participants continued to expect only one to two Fed rate cuts by the end of 2024, said BNM.
On the home front, the central bank noted that the ringgit depreciated by 0.3 per cent against the US dollar, in line with most regional currencies (regional average: -0.4 per cent).
"The 10-year Malaysian Government Securities (MGS) yield decreased by three basis points alongside a decline in US bond yields, while the FBM KLCI traded lower by 0.4 per cent," it added.
Meanwhile, both the headline and core inflation remained unchanged in June at two per cent and 1.9 per cent, respectively.
Transport inflation rose to 1.2 per cent (May 2024: 0.9 per cent), mainly due to diesel price adjustment, while food at home also recorded a higher inflation of 0.9 per cent in June (May 2024: 0.5 per cent), driven mainly by fresh seafood and vegetables.
"However, these were offset by lower inflation in the clothing and footwear as well as food away from home," it said. - Bernama
