Private sector financing grows at slower pace

Saturday December 29, 2012

PETALING JAYA: Private sector net financing grew at a slower rate of 12.3% year-on-year in November, Bank Negara said in a statement on the monetary and financial developments for the month.The central bank said the banking system remained well-capitalised, with risk-weighted capital ratio and core capital ratio at 15.3% and 13.4%, respectively.

“The level of net impaired loans remained stable at 1.4% of net loans, while the loan loss coverage ratio remained above 100%,” it said.

The growth of business loans outstanding moderated, following large repayments during the month. Loans disbursed to businesses remained high.

Loans to households also grew at a more moderate rate of 11.6%. Loan demand was sustained, supported mainly by loan applications from households.

“In November, the ringgit appreciated against the currencies of Malaysia’s major trading partners, as the stronger-than-expected third-quarter Malaysian economic data contributed to favourable investor sentiment,” it pointed out.

However, the ringgit’s strength was tempered by uncertainty surrounding the US presidential election and concerns over the US fiscal position.

This, in turn, resulted in heightened investor risk aversion and prompted some withdrawal of foreign funds during the month.

In December, the ringgit depreciated against the currencies of most of Malaysia’s major trading partners, with the exception of the Japanese yen.

Source: The Star

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