Strong demand for non-E&E manufactured products and higher commodity prices will provide further impetus to export growth, Bank Negara Malaysia (BNM) says in a statement on Monetary and Financial Developments in August 2021.
BNM says that moving forward, export performance will continue to be underpinned by external demand and continued to upcycle in global technology. “Exports for the month of August grew by 18.4% (July: 5.0%), reflecting continued strength across products and markets,” it says.
On headline inflation for the month of August, it says that headline inflation declined to 2.0% in August (July: 2.2%), reflecting mainly lower inflation in the transport (August: 11.0%; July: 11.6%) and miscellaneous goods and services (August: -0.6%; July: 0.1%) categories, respectively. It also says that underlying inflation, as measured by core inflation, moderated to 0.6% during the month (July: 0.7%).
On the banking system, its capitalisation remains strong and that it was well-capitalised to withstand potential stress and to sustain credit intermediation in the economy.
Capital ratios declined marginally from the previous month, mainly due to dividend payments by a few banks. “Despite a marginal decline in capital ratios, banks’ excess capital buffers remained strong at RM129.2 billion as of August 2021,” BNM says.
On Asset quality in the banking system, BNM says that it remained intact and that banks continue to facilitate repayment assistance to viable borrowers facing temporary financial difficulties amid a credit risk outlook that remains challenging.
“The share of loans classified by banks as higher credit risk remains elevated at 10.8% of total loans,” it says.
