BANK Negara Malaysia’s (BNM) initiatives have helped cushion the pressure on the ringgit, resulting in the local currency appreciating by 0.5% on a nominal effective exchange rate basis.
The coordinated initiatives by the government and BNM with government-linked companies and government-linked investment companies, as well as engagements with corporates and exporters, resulted in greater and more consistent flows into the foreign exchange market.
“The central bank is also deploying the tools at its disposal to ensure that domestic financial markets remain orderly and continue to function efficiently,” it said in a statement.
BNM said from the beginning of the year until May 15, the ringgit has depreciated by 2.4% against the US dollar, in line with the movements of other regional currencies.
The daily average foreign exchange (FX) trading volume increased to US$17.6 bil (RM82.4 bil) from Feb 26-May 15 (Jan 2-Feb 23: US$15 billion) alongside a narrower bid-ask spread, indicating improved liquidity in the domestic FX market.
Meanwhile, credit growth to the private non-financial sector increased to 5.2% (Q4 2023: 4.8%), supported by higher growth in outstanding loans to businesses (4.9%; Q4 2023: 3.7%) and households (6.2%; Q4 2023: 5.7%), while outstanding corporate bonds grew at a more moderate pace (3.2%; Q4 2023: 4.2%), BNM said.
The central bank said the higher business loan growth was driven mainly by higher growth in investment-related loans.
“By sector, the stronger growth was supported by the construction and services sectors.
“For households, outstanding loan growth was higher across most loan purposes, reflecting continued demand for loans, particularly for the purchase of housing and cars,” it added. – May 17, 2024
