Bank Negara Malaysia published its Monetary and Financial Developments update for December 2025, showing headline inflation rising to 1.6% and core inflation to 2.3%, while growth in credit to the private non-financial sector eased slightly and banking system liquidity remained strong. Headline inflation rose partly due to higher electricity CPI amid lower discounts related to generation costs, while flood-related disruptions lifted prices for selected vegetables; the increase in core inflation largely reflected the dissipation of base effects from earlier declines in postpaid mobile prices. The Index of Wholesale and Retail Trade grew by 5.2% in November 2025 (5.7% previously). Credit growth moderated to 5.3% (5.5%), with business loans slowing to 3.7% (5.0%) and outstanding corporate bonds accelerating to 6.9% (5.5%), while household loan growth was broadly stable at 5.6% (5.7%). The banking system recorded an aggregate Liquidity Coverage Ratio of 154.8% (145.6%), gross impaired loans remained at 1.4% and net impaired loans edged down to 0.9% (1.0%), with loan loss coverage at 128.7% (124.6%). In markets, the ringgit appreciated 1.8% against the US dollar (NEER: 1.0%) amid foreign inflows into the domestic bond market, 10-year Malaysian Government Securities yields increased by 2 bps, and the FBM KLCI rose 4.7%.
Bank Negara Malaysia 2026-01-30
Bank Negara Malaysia reports December 2025 headline inflation rising to 1.6% as private-sector credit growth moderates
Bank Negara Malaysia's December 2025 Monetary and Financial Developments update reports headline inflation at 1.6% and core inflation at 2.3%, with stable banking system liquidity and moderated credit growth. The ringgit appreciated 1.8% against the US dollar, and the FBM KLCI increased by 4.7%.