KUALA LUMPUR, August 19 – The ringgit depreciated by 5.8 percent in the second quarter of 2023 but has increased by 1.1 percent in the third quarter so far (as of August 15, 2023) due to growing expectations that the monetary tightening policy in the United States (US) is nearing its end. Bank Negara Malaysia (BNM) Governor, Datuk Abdul Rasheed Ghaffour, stated that global developments continue to be a significant factor driving the domestic financial conditions in the second quarter of 2023.
“Global financial market sentiment was affected by concerns about the slower global economic growth prospects and weaker-than-expected economic recovery in China,” he said during a press conference here on Friday. He further explained that these concerns were exacerbated by apprehensions over the highest-ever US debt ceiling crisis in the first two months of the second quarter, along with current financial market expectations that the monetary policy will continue to tighten in advanced economies.
BNM will continue to closely monitor both global and domestic financial conditions and ensure that market adjustments remain orderly. Abdul Rasheed emphasized that BNM’s presence in the foreign exchange market is to curb excessive currency movements. Non-financial private sector credit growth moderate, corporate bonds rise Credit growth to the non-financial private sector moderated to 3.8 percent (1Q 2023: 4.1 percent) due to slower growth in accumulated business loans.
However, the growth in accumulated corporate bonds increased to 4.9 percent (1Q 2023: 4.4 percent). Meanwhile, accumulated business loans increased by 0.7 percent, primarily due to slower growth in working capital loans to non-small and medium enterprises (SMEs). Nevertheless, sustainable investment-related loan growth remained steady, with stable growth recorded for the purchase of fixed assets and non-residential properties. For households, accumulated loans grew by 5.1 percent, primarily driven by loans for residential property and car purchases.
