Qualampur: Malaysia’s banking system maintained strong liquidity buffers in December 2024, with a total liquidity coverage ratio (LCR) of 160.7% compared to 147.9% in November, Bank Negara Malaysia (BNM) said.
In its monthly highlights of December 2024 released on Friday, the Central Bank said that the total loan-to-fund ratio was broadly stable at 83.5% (November 2024: 83.8%).
BNM said, “The flexibility of the banking system is decreasing from the quality of sound property, the overall gross impaired debt ratio in November with improvement from 1.5% to 1.4% in November, while the net impaired debt ratio remained stable at 0.9%,” BNM said.
The report also stated that the loan loss coverage ratio, including regulator reserves, was prudent at 129.1% of impaired loans above 128.0% in November 2024.
According to the Central Bank, the high growth in LCR was mainly due to a decline in the expected cash outflow, as the interbank borrowing maturity was rolled for more than 30 days.
“This is in line with the pre-bank measures of banks to create buffers in preparation for the end of the seasonal year,” said this.
The BNM stated that, in December, the headline and core inflation were 1.7% (November 2024: 1.8%) and 1.6% (November 2024: 1.8%) respectively. Both headlines and core inflation were an average of 1.8% in 2024.
It said that the wholesale and retail trade index increased 3.9% in November 2024 (October 2024: 5.1%).
The Central Bank said that credit for private non-financial sector increased 5.2%(November 2024: 5.4%), outstanding trade loans (5.1%; November 2024: 5.4%) and one in development for corporate bonds (3.4%) Between moderation;
The bank stated that the financial markets were largely affected by the expectations of reducing the more gradual American monetary policy in the more gradual American monetary policy in 2025, amidst amendment in the development and inflation forecasts of the US Federal Reserve.
“In addition, uncertainties arising from potential trade policies by the US administration continued to weigh the risk of investors,” he said. – Bernma
