Headline inflation increased to 3.3% in November (October: 2.9%), mainly reflecting higher inflation in the food and non-alcoholic beverages (November: 2.7%; October: 1.9%) and transport (November: 12.7%; October: 11.3%) segments.
BNM said that underlying inflation, as measured by core inflation, was also higher at 0.9% during the month (October: 0.7%), driven mainly by discretionary items (for example, food away from home), in line with the gradual reopening of the economy.
On IPI, BNM said that IPI registered faster growth of 5.5% in October.
It said that overall IPI recorded a faster growth of 5.5% in October driven by a strong recovery in manufacturing activity and electricity generation.
The recovery in manufacturing was driven mainly by the domestic-oriented sectors (such as food and transport), which registered broad-based improvement following the reopening of the economy. Meanwhile, the production of exports remained strong.
BNM said that net financing growth increased to 4.4% (October: 4.0%), driven by higher growth in outstanding loans (November: 4.3%; October: 3.3%), while outstanding corporate bond growth moderated (November: 4.8%; October: 5.9%).
It said that growth in outstanding household loans increased to 4.1% (October: 3.7%), amid higher loan disbursements for credit card spending and the purchase of residential properties and passenger cars.
Businesses’ outstanding loan growth increased to 4.8% (October: 3.1%) amid continued growth in outstanding working capital loans (November: 8.0%; October: 5.9%).
On domestic financial markets, it said that it affected by financial markets were affected by concerns surrounding the Omicron variant.
In end-November, global investor sentiments were driven mainly by the emergence of a new variant of concern, Omicron, which largely outweighed concerns surrounding persistent inflationary pressures in advanced economies.
It said that consequently, global bond yields, including the benchmark 10-year MGS yield, fell concurrently with the decrease in long-term US Treasury yields.
BNM said that the FBM KLCI declined by 3.1% and the ringgit depreciated by 2.0% against the US dollar, in line with most regional currencies. Weaker commodity prices amid worries surrounding the new variant had also affected the ringgit exchange rate.
Banks will remain well-capitalised to withstand potential stress and to support credit growth in the economy.
It said that the banking system’s excess capital buffers remained strong at 3 billion as at November 2021.
On its Asset quality, Banks continue to facilitate repayment assistance to viable borrowers facing temporary financial difficulties.
It said that while overall gross and net impaired loans ratios remained broadly stable at 1.5% and 0.9%, impaired loans recorded a marginal decline (-2.1%) compared to the previous month.
It said that Total provisions set aside against potential credit losses currently stand at 1.9% of total banking system loans.
