KUALA LUMPUR: Malaysia’s financial institutions are well-positioned to withstand severe macroeconomic and financial shocks, with excess capital buffers of RM154 billion as at March 2019, said Bank Negara Malaysia (BNM).
BNM said the banking system capitalisation remains strong with such capital buffers.
“The increase in Common Equity Tier One (CET-1) capital in the first quarter of 2019 was mainly attributable to an increase in retained earnings as several banks recognised profits for the financial year ending 2018,” the central bank said in its monthly highlight for March 2019.
In March, the bank said ringgit depreciated by 0.3 per cent against the US dollar, in line with most regional currencies.
“This was driven mainly by non-resident outflows from the equity market as investor sentiments were subdued following concerns over the global growth and geopolitical outlook, as well as domestic factors. Consequently, the FTSE Bursa Malaysia KLCI index declined by 3.8 per cent.
“The 10-year Malaysian Government Securities (MGS) yield declined by 13 basis points, driven by continued non-resident inflows of RM2.7 billion into the government bond market. This was in line with the downward trend in global sovereign bond yields amid easier global financial conditions,” it said.
The central bank also highlighted that the headline inflation turned positive in March, mainly reflecting higher domestic fuel prices.
The headline inflation increased to 0.2 per cent in March (February: -0.4 per cent), reflecting the less negative transport inflation (March: -3.0 per cent; February: -6.8 per cent).
“This was due to the higher global oil price which led to higher domestic fuel prices. Inflation in other categories were relatively stable. Excluding the impact of the changes in the consumption tax policy, core inflation was unchanged at 1.6 per cent,” added the bank. – Bernama
