Ringgit appreciated 1.8 pct against US dollar in April — Bank Negara

KUALA LUMPUR: The ringgit appreciated 1.8 per cent against the US dollar in April following inflows into both the bond and equity markets, said Bank Negara Malaysia (BNM).

The central bank said the local unit was supported by measures taken by the Financial Market Committee, specifically to enhance liquidity in the bond market and allow greater hedging flexibility in the onshore market.

It added that optimism over the country’s economy, given the improving current account surplus and trade outlook resulted in a resumption of non-resident inflows into the domestic bond market in April.

“Bond yields also declined amid continued support from domestic institutional investors. The equity market continued to receive non-resident inflows amid improved domestic sentiment following better-than-expected corporate earnings,” said BNM in its statement on monthly highlights for April 2017.

Meanwhile, financial institutions were well-positioned to withstand any adverse macro-economic and financial shocks, with capital buffers of RM132.5 billion, as at April 2017.

“More than 75 per cent of total capital continued to be represented by high quality loss absorbing capital in the form of equity, retained earnings and reserves,” said the central bank.

The central bank expected business loan growth to be underpinned by domestic investment, particularly in the manufacturing and services sectors, moving forward.

Outstanding total loans growth increased to 6.1 per cent in April 2017 from 6.0 per cent in March 2017, primarily driven by higher growth of loans to businesses, other than small and medium enterprises, to 5.5 per cent in April from March’s 4.9 per cent.

Higher business loan growth was supported by working capital financing, it added.

For April 2017, headline inflation declined to 4.4 per cent from 5.1 per cent in March as domestic fuel prices were lower during the month with RON95 petrol prices averaging around RM2.13 per litre during compared with RM2.30 in March. Core inflation in April remained unchanged at 2.5 per cent. BNM said exports would continue to be supported by the improvement in global demand.

Exports recorded a robust growth of 24.1 per cent in March 2017 while manufactured export growth continued to be driven by semiconductor devices and petroleum products.

“Commodity exports also increased, supported by prices and demand for crude oil, liquefied natural gas and rubber,” it added. — Bernama