Bank Negara: Net financing grew 7.4% in February
KUALA LUMPUR: Net financing through banking system loans and corporate bonds showed a growth of 7.4% last month compared with 7.2% in January, says Bank Negara.
In its monthly highlights February 2018 released yesterday, the central bank said the growth of outstanding loans of the banking system rose to 4.5% in February from 4.2% the previous month, while net outstanding issuances of corporate bonds continued to expand at 16.4% against January’s 16.6%.
It said the increase in loan growth was due mainly to household loans, which climbed by 5.6% in February compared with 5.3% in January, driven by loans for the purpose of residential property, securities, and personal financing.
On headline inflation, Bank Negara said it declined to 1.4% last month from 2.7% in January.
Inflation in the transport category was -0.3% compared with 5.7% the previous month, due to lower domestic fuel prices during the month.
In the food and non-alcoholic beverages category, inflation was at 3% for February versus 3.8% in January.
“This reflected lower prices of some fresh food items following the festive season price control scheme during the Chinese New Year period, and better weather conditions thereafter,” the bank said. On the Index of wholesale and retail trade, the central bank said the index recorded a higher growth of 7.4% in January compared with 5.9% in December 2017, driven by improvements across all segments.
Meanwhile, the central bank said that in February, domestic financial markets were affected by the spike in global financial market volatility following the sharp correction in the United States equity market.
“The ringgit depreciated by 0.8% against the US dollar, due mainly by net portfolio outflows,” it said.
It added that foreign exchange swap volume decreased by US$9.2bil to US$102.9bil, due mainly to a drop in interbank swap activity.
On banks’ funding structure, Bank Negara said the loan-to-fund and the loan-to-fund-and-equity ratios stood at 83.5% and 72.9%, respectively, reflecting banks’ broader funding base.
“The banking system’s liquidity coverage ratio stood at 133.8 per cent, well above the transitional minimum regulatory requirement of 90%,” it added.