October inflation declines to 3.7 per cent — BNM

KUALA LUMPUR: Headline inflation in October declined to 3.7 per cent compared with 4.3 per cent recorded in the previous month, mainly due to lower transport inflation at 12.1 per cent during the month versus 15.8 per cent in September.

In a statement yesterday, Bank Negara Malaysia ( BNM) said although RON95 petrol averaged only slightly lower at RM2.18 per litre in October compared with RM2.19 per litre in September, the higher base of the RON95 price in October 2016 versus September 2016 resulted in the lower inflation for the transport category.

“Core inflation was also lower at 2.3 per cent during the month ( September: 2.4 per cent).The slower inflation for core items were broad- based with lower pervasiveness observed across most categories,” it said.

BNM said the financial market was relatively stable in October 2017 as investors traded cautiously leading up to the announcement of the new US Federal Reserve Chairman and the 2018 US budget resolution, which would pave the way for tax reforms.

This, the central bank said, resulted in relatively small movements in the ringgit and equity markets. The bond market, however, experienced some upward pressure in yields amid non-resident outflows of RM2.2 billion.

Meanwhile, net financing growth was sustained at 6.5 per cent in October compared with 6.6 per cent in September while the growth in net outstanding issuances of corporate bonds increased to 12 per cent and the growth of outstanding loans in the banking system moderated to 4.6 per cent.

“The moderation in loans growth was due to the business sector ( October: 4.1 per cent; September: 5.8 per cent), in part driven by the stronger growth in loan repayments relative to disbursements,” it said. Malaysia’s international investment position recorded a net asset position of RM21.5 billion, equivalent to 1.6 per cent of gross national income ( GNI) as at end- September 2017 compared with RM42.3 billion or equivalent to 3.2 per cent of GNI as at end- June 2017.

BNM said Malaysia’s net asset position supports resilience to a variety of shocks, including potential outflows associated with external liabilities.

“Financial institutions are well- positioned to withstand any adverse macroeconomic and financial shocks, with excess capital buffers of RM135 billion as at October 2017,” it added. — Bernama