KUALA LUMPUR: The ringgit depreciated by 5.8 per cent in the second quarter of 2023 (2Q 2023) but has appreciated by 1.1 per cent so far in 3Q 2023 (as at Aug 15, 2023), amid growing expectations that monetary policy tightening in the United States is nearing its end.

Bank Negara Malaysia (BNM) governor Datuk Abdul Rasheed Ghaffour said global developments continued to be the dominant factor in driving domestic financial conditions during the quarter.

“Global financial market sentiments were dampened by concerns over a slower global economic outlook and weaker than expected rebound in China’s economy,” he said.

This was further compounded by concerns over the US debt ceiling crisis during the first two months of the quarter, alongside ongoing financial market expectations of continued monetary policy tightening in advanced economies, he said at a press conference here, today.

He said the central bank will continue to closely monitor global and domestic financial conditions and ensure market adjustments remain orderly.

He noted that BNM’s presence in the foreign exchange market is to stem currency movements that are deemed excessive.

Growth in credit to private non-financial sector moderated, corporate bonds grew

The growth in credit to the private non-financial sector moderated to 3.8 per cent (1Q 2023: 4.1 per cent) on account of slower growth in outstanding business loans.

Outstanding corporate bonds growth, however, improved to 4.9 per cent (1Q 2023: 4.4 per cent). Meanwhile, outstanding business loans grew by 0.7 per cent, due mainly to lower growth in working capital loans to non-small and medium enterprises (SMEs).

Notwithstanding this, investment-related loan growth remained sustained with steady growth recorded for the purchase of fixed assets and non-residential properties.

For households, outstanding loans expanded by 5.1 per cent, mainly driven by loans for the purchase of residential properties and cars. – Bernama